Single Store Owner

OCT 2016

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PERSPECTIVES 6 / Convenience Store News for the Single Store Owner / OCTOBER 2016 Small Fuel Retailers Call for Even Playing Field New coalition says fuel blenders have unfair advantage BY BRIAN BERK Ten to 15 cents is a huge number, though," he said. "[One convenience store retailer] sold more than $100 million in RINs last year. I don't have any prob- lem with them having RINs for sale. The problem is I compete with this [retailer]." He shared the example of a competitor in his home area of Sherman selling gasoline at $1.79 per gallon. Meanwhile, Lone Star has to pay major oil companies $1.80 per gallon just to purchase gaso- line, making it impossible to sell it to consumers for $1.79 — unless it takes a loss. "[This retailer] has an advantage on us because it sells RINs," Douglass said. "That puts us at a clear disadvantage because we are marketing in the same market. A government-administered program shouldn't tilt the field. Not everyone gets this benefit. It It should be level." should It should be level." be It should be level." level It should be level." " The The Small Retailers Coalition Small Retailers Coalition recently drafted a letter to U.S. ecently recently drafted a letter to U.S. drafted a letter to U.S. Environmental Environmental Protection Protection Agency Agency (EPA) Administrator (EPA) Administrator Janet McCabe asking her to move the RIN so-called point of obligation to the "rack," a term used to describe the term used to describe the terminals that hold bulk fuels rminals terminals that hold bulk fuels that hold bulk fuels before they move to retail outlets. tail outlets. "Right now, the EPA's transfer point of the RIN is A's "Right now, the EPA's transfer point of the RIN is transfer point of the RIN is at the refinery," said Douglass. "If they would trans- at the refinery," said Douglass. "If they would trans- ouglass. at the refinery," said Douglass. "If they would trans- "If they would trans- fer fer it to the rack — the point-of-sale — everyone is it fer it to the rack — the point-of-sale — everyone is to the fer it to the rack — the point-of-sale — everyone is rack fer it to the rack — the point-of-sale — everyone is — the fer it to the rack — the point-of-sale — everyone is point-of-sale — everyone is on the same page." McCabe responded to the group, saying any unfair advantage was not the intent of Congress and that she understands the predicament cur- rently faced by members of the Small Retailers Coalition. However, she did not discuss if any action would be taken and what that might be. Conversations between the coalition and EPA are ongoing, Douglass relayed. Anyone interested in joining the Small Re- tailers Coalition or getting more information is encouraged to visit the organization's website: smallretailerscoalition.com. SSO D ouglass Distributing Co. CEO Bill Douglass has founded the Small Retailers Coalition, whose goal is to "even the playing field" regard- ing renewable identification num- bers (RINs). Douglass, whose Sherman, Texas-based com- pany owns 30 Lone Star Food Store locations (22 of which it operates) told Convenience Store News for the Single Store Owner that alternative fuel blenders, including several large convenience store chains, receive RINs in essence as a reward for blend- ing renewable fuels, such as ethanol and diesel, as required under the Renewable Fuel Standard (RFS). The RFS seeks to address global warming, reduce dependence on foreign oil, and bolster the rural economy by economy by requiring a steady increase in the over- requiring economy by requiring a steady increase in the over- a steady economy by requiring a steady increase in the over- increase economy by requiring a steady increase in the over- in economy by requiring a steady increase in the over- the economy by requiring a steady increase in the over- over- all amount of ethanol and other renewable fuels blended into gasoline over time. The RINs generated from fuel blending can be sold on the open market and currently generate a return of 10 cents to 15 cents per gallon, accord- ing to Douglass. The price of RINs are determined based upon supply and demand, similar to any other commodity. Some of this return is applied at the pump, pro- viding fuel blenders with an unfair advantage that is extremely difficult to compete with, Douglass stated. "The advantage used to be one to 3 cents per gal- lon, which is something we didn't complain about.

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