Sponsored by:
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PMAA's weekly update on important national industry issues.

 
PMAA's Weekly Review - July 18, 2014  [WR-14-28]

 

 

In This Issue:
 

RESULTS FROM NCWM ANNUAL CONFERENCE

 

TEMPORARY HIGHWAY BILL DEAL ON THE HORIZON

 

HOUSE PASSES PERMANENT BONUS DEPRECIATION BILL; WHITE HOUSE WOULD VETO

 

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PMAA MEMBER SERVICES SPOTLIGHT FEATURING: Worldpay
 

 
 

 
 

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RESULTS FROM NCWM ANNUAL CONFERENCE
Victory for Petroleum Marketers

This week, the National Conference on Weights and Measures (NCWM) held its annual meeting in Detroit, Michigan. Items on the agenda important to petroleum marketers were a 10 micron diesel filter mandate and a proposal to create an official diesel gallon equivalent (DGE) method of sale for CNG and LNG.

In a significant victory for PMAA, the NCWM voted down a proposal to mandate a 10 micron diesel filter. If the item were to have been approved, it would have cost marketers approximately $230 extra a month due to having to change diesel filters more often. This estimate didn't take into account for loss of sales due to changing filters more often.

Currently, the market uses a 30 micron filter for diesel fuel and a 10 micron filter for gasoline. PMAA commissioned a study by Research Laboratories, Inc. to compare the different micron diesel filters. The study concluded that a 30 micron diesel filter is just as effective as a 10 micron in filtering particulates. Forcing a 10 micron diesel filter on petroleum marketers would also have impacted the functionality of the automatic shut-off nozzle because it requires a certain amount of flow in order to shut off when a vehicle’s tank is full. If a dispenser is running slowly, the tank may overflow creating a cleanup issue. Bottom line: mandating a 10 micron diesel filter was unnecessary.

PMAA would like to thank PMAA Chairman Sam Bell, Kansas marketer Scott Zaremba, and Brian Parnell with Mapco Express for representing petroleum marketers at NCWM. They were instrumental in making sure the micron filter proposal did not move forward. Also, PMAA would like to thank Minnesota marketer Vern Kelley who helped with the micron filter study.

Additionally, the NCWM voted down the proposal to create an official diesel gallon equivalent (DGE) method of sale for CNG and LNG. What does this mean? CNG will continue to be sold in gasoline gallon equivalents. Regarding LNG, since there are no standards in place, it may be sold in diesel gallon equivalents. However, given the LNG-DGE is not in the NCWM handbook, this method of sale still lacks a uniform standard across states. The DGE unit is necessary to help facilitate the introduction of natural gas for trucking companies and other operators of heavy-duty vehicles to better understand the value proposition provided by natural gas. In addition, it would have allowed the taxation of CNG and LNG on a per-gallon basis instead of a mass basis. However, this issue remains unresolved and debate on the possibility of a mass standard within the NCWM will continue, something that marketers and the natural gas industry oppose. Allowing the method of sale to be determined by DGE will allow trucking companies to make easier cost comparisons  

TEMPORARY HIGHWAY BILL DEAL ON THE HORIZON

In a rush to complete a short-term deal before federal officials start delaying payments on August 1 to states for road and bridge construction projects, the House passed a bill (H.R. 5021) this week that would fund the highway program through May 2015.

Now the Senate will bring up the House bill and two alternative funding bills. The final outcome is likely to be passage of the House funding bill with a refocus again on a long term highway funding solution. Although the House passed the bill 367-55, it is opposed by some Democrats who want to hold off on a short term bill in order to keep the pressure on to pass a longer term bill.

In addition to the House bill, the Senate will debate two other funding patches. One that was approved by the Senate Finance Committee and a proposal authored by Sen. Barbara Boxer (D-CA). The House bill is similar to the Senate Finance bill with both providing roughly $10.8 billion for the Highway Trust Fund.

Both plans use pension smoothing and an extension of customs user fees as offsets, but the Senate Finance Committee bill also includes $4.3 billion in tax compliance provisions that will not pass the House. Although President Obama would also like a long-term fix, he has approved the short term House bill.

Most significant to petroleum marketers, the House and Senate Finance Committee plans both contain language fought by PMAA that would transfer one billion dollars transfer from the Leaking Underground Storage Tank (LUST) Trust Fund, leaving only $400 million.

PMAA, NACS and SIGMA sent a letter in June to Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) urging the Senate to reject a proposal for a second, fatal raid of the Leaking Underground Storage Tank (LUST) Fund. In 2012 Congress hijacked $2.4 billion of the $3.8 billion that PMAA, NACS and SIGMA members paid in fees to the LUST Fund. The $2.4 billion was moved to fund the Highway Trust Fund.

Petroleum marketers have supported the LUST Fund and have paid $3.8 billion in LUST taxes since its inception. In 2012, Congress included a provision in the Highway bill that raided the LUST Trust Fund of $2.4 billion dollars and moved it to the Highway Trust Fund. While PMAA opposed this provision, Congress could have lessened the blow by including language which would have required that future revenue collected for the LUST Fund is used for its intended purpose. Now Congress is back to raid from the petroleum marketers fund, this time proposing to take one billion dollars of the remaining $1.4 billion from the fund.

PMAA believes the LUST Fund should be solely used to support UST leak prevention and remediation programs. PMAA is also concerned that states might increase tank fees to account for the LUST Fund shortfall. Raiding another one billion dollars from the fund will cripple important programs and ultimately harm marketing companies who have paid the tax and built the fund over the past 25 years. If the fund isn’t being used for its intended purpose, the fee should be eliminated. 

HOUSE PASSES PERMANENT BONUS DEPRECIATION BILL; WHITE HOUSE WOULD VETO

On July 11, 2014, the House passed, by a bipartisan vote of 258-160, H.R. 4718, a bill that would restore and make bonus depreciation permanent. Bonus depreciation allows businesses to immediately write off more than half the cost of some investments such as new equipment.

President Obama has threatened to veto a permanent bonus depreciation provision but may agree with the tactic the Senate will probably take – to extend for two years the previous bonus depreciation allowance that expired on December 31.

PMAA strongly supports H.R. 4718 because it makes the depreciation permanent and expands it to stores that are leased as well as those that are owned.
  

PMAA PARTNER SPOTLIGHT FEATURING: MERIDIAN ASSOCIATES, INC.
The Seven Daily Practices of Super Successful Petro CEOs by Betsi Bixby

What exactly do super successful marketers do differently? Before I answer that question, let’s get clarity on what’s super success versus common, typical everyday success.
In the gallon-driven petroleum world, kudos most often go to the CEOs snagging the largest volume gains. Every refiner convention, you see the list. But those volume gains don't always translate to biggest profit gains and certainly don’t guarantee the happiest owners!

Knowing what happens behind the volume gains from seeing countless financial statements, I prefer to define super success this way:

      Super Success = Achieving Desired Profit and Desired Lifestyle with Joy.

Please read Betsi’s article in its entirety here. To learn more about PMAA’s Platinum Partner, Meridian Associates, please visit or contact them at 800.728.9008.      

PMAA MEMBER SERVICES SPOTLIGHT FEATURING: Worldpay
We are experts in payments - and we share what we know to help your business prosper.

Worldpay is the preferred payment processing provider for the Petroleum Marketers Association of America. Worldpay is committed to providing our customers great value and excellent customer service. We work with all types and all sizes of business. So whether you’re just starting out or you work for a global business, we’ll:

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Should you have any additional questions on this or any other petroleum solutions, please contact PMAA Customer Service at 877.862.9195 or PMAA’s WorldPay Executive Client Manager, Glenda Preen at 972.325.1801.    

 

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