(Sept 26): The White House has offered assurances that the Trump administration won’t ban US diesel exports, Senator Ted Cruz told refining industry leaders late on Friday.

Cruz’s message, described by people familiar with the matter who asked not to be named because the conversation was private, comes as the administration weighs options for slashing diesel prices amid a historic run-up in costs for the fuel. 

President Donald Trump said earlier this week he’d asked his staff to consider a potential ban on US diesel exports, after rural and farm-state lawmakers appealed for limits to check retail prices that hit US$6.53 (RM26.60) per gallon for the first time ever earlier this week.

The president wants to see pump prices fall and is evaluating all options on the table, a White House official said. Representatives for Cruz and the American Fuel and Petrochemical Manufacturers Association, which conducted the call, did not immediately respond to requests for comments. 

To be sure, the counsel is consistent with a message that’s been delivered for months by some of Trump’s top deputies, who’ve consistently warned that diesel export curbs would ultimately cause more harm than good.

Yet Trump has shown himself to occasionally be unpredictable, sometimes embracing unorthodox policy actions without complete buy-in from his top aides. And he’s the ultimate decider on the matter.

Cruz, a Republican from Texas, described having received assurances from the White House — not specifically from the president. He did not provide more specifics on who had ruled out an export ban, the people said.

Neither Trump nor administration officials have decided on a single approach, as they continue analysing the economic effects of a potential short-term diesel export ban and consider other steps to rein in costs. Ideas that have been floated include lifting limits on the sale of dyed red diesel, a fuel that’s normally reserved for off-road use.

That could effectively translate to a suspension of some excise taxes on diesel, including a federal rate of about 24 cents a gallon, since the dyed diesel typically used by farmers and other off-road consumers is tax-exempt. Under an approach allowing wider use of red diesel both on- and off-road, diesel buyers could dye the fuel and use it on highways tax-free. 

The resulting cost reductions would be felt by farmers, truckers and other users of diesel under that plan. 

Industry representatives also have suggested the administration exempt red diesel from a federal biofuel-blending programme known as the Renewable Fuel Standard, some of the people said. Removing red diesel from the production volumes used to calculate refiners’ individual biofuel-blending quotas — and allowing farmers to buy the exempt fuel — could translate into a 30-cent reduction per gallon, according to some industry estimates.

Energy Secretary Chris Wright has emphasised this week that the administration is not pursuing a broad export ban, and instead has encouraged voluntary industry changes to boost diesel supply. 

“We will not cease exports of US diesel, but may there be some tweak in where diesel flows out of US refineries? I think we are going to see that because it can stop the rise in price of diesel,” he said in a livestream conversation hosted by Heatmap on Wednesday. “Are we going to make adjustments with diesel? I think so. But no, I don’t think you will see a blanket ban on diesel.”

Uploaded by Tham Yek Lee