RIN’s not to blame for higher consumer gasoline prices
Over the summer gasoline prices hit 7-year highs, but an analysis by the Renewable Fuels Association reveals that the compliance credit market mechanism in the Renewable Fuels Standard is not to blame.
RFA Chief Economist Scott Richman tells Brownfield using the Energy Information Administration’s analytic framework, they confirmed that Renewable Identification Numbers or RIN’s are a factor in wholesale gas prices, but there is no evidence that RIN costs have a measurable effect on cost for consumers.
“Refiners and some politicians were saying that RIN prices were going higher and that was driving up their costs, they were having to eat those costs, and some may even go bankrupt. At the same time, they were saying RIN prices are getting passed along and they are driving up consumer prices of gasoline. It can’t be both.”
RFA CEO Geoff Cooper says oil refiners are using the complexity of RIN’s to their advantage in a battle against the RFS. Richman says the main culprit of higher prices at the pump is crude oil prices.
“And crude oil prices have risen dramatically over the last 12-18 months primarily because of the actions of a group of countries known as OPEC+ (Organization of the Petroleum Exporting Countries) as well as a moderate cut back in production from the US.”
The US Energy Information Administration estimates the cost of crude oil accounted for more than half of what consumers paid for gasoline from 2011-2020 and crude oil combined with taxes was nearly three quarters of the total.