U.S. Senator Ted Cruz said in a call with refining industry leaders late Friday that the White House had assured him the administration of President Donald Trump would not ban U.S. diesel exports, as Washington considers options to lower domestic fuel prices after the retail price rose to a record $6.53 per gallon (3.8 liters).
Cruz conveyed the White House message during the call, according to people familiar with the conversation who asked not to be identified because it was private. The senator, one of Trump's most prominent allies, said he had received the assurances from the White House, not from the president himself, without identifying the officials who ruled out imposing the ban.
Options to lower diesel prices
Trump said earlier in the week that he had asked his aides to study a possible ban on diesel exports after lawmakers from rural and agricultural states called for restrictions to lower retail prices.
A White House official said Trump wants to lower fuel prices and is considering all available options. The president and his administration officials are still studying the economic impact of a short-term export ban, along with other measures to curb rising diesel costs.
The ideas under consideration include expanding the sale of red diesel, a fuel typically used for off-road vehicles and equipment that is not subject to tax. This could effectively suspend some diesel taxes, including a federal tax of about 24 cents per gallon.
Allowing red diesel to be used on and off the road could lower fuel costs for farmers, truck drivers and other diesel users. Refining industry representatives also proposed exempting the fuel from a federal biofuel blending program, a step that could lower the price by about 30 cents per gallon, according to industry estimates.
Call for a voluntary increase in supply
U.S. Energy Secretary Chris Wright said the administration was not seeking a blanket ban on diesel exports and instead called on industry companies to make voluntary changes to increase supply.
We will not stop U.S. diesel exports, but could there be some adjustment in the destination of diesel flows from U.S. refineries? I think we will see that because it could stop the rise in the price of diesel
Wright made the remarks in a conversation broadcast on Wednesday, amid a split among the U.S. president's senior advisers over potential restrictions on diesel exports. Oil industry executives warned that an export ban could ultimately increase costs worldwide.
United States is the largest diesel exporter
The United States is the world's largest diesel-exporting country, with net exports of about 1.2 million barrels per day out of 5.1 million barrels, representing total U.S. diesel production, according to data from U.S. bank Morgan Stanley.
Diesel is not widely used in ordinary passenger cars in the United States, but it powers heavy transportation, including heavy-duty pickup trucks, large trucks and trains, as well as agricultural and construction equipment.
