Learn about the recent EPA waiver issued to combat fuel shortages in the Midwest following the shutdown of Exxon Mobil's refinery in Joliet, Illinois. Find out how this impacts gasoline prices and stockpiles in the region.
(Multibagger) - The U.S. Environmental Protection Agency (EPA) on Thursday issued an emergency waiver to help alleviate fuel shortages in four states where the supply of gasoline has been impacted by the shutdown of the Exxon Mobil Refinery in Joliet, Illinois.
Exxon Mobil shut down its 251,800 barrel-per-day refinery at Joliet, Illinois, last month due to a power outage after a storm. Although power was restored to the refinery by July 24, it is likely to take the company at least a few weeks to restart the facility.
The EPA's waiver, which applies to Michigan, Wisconsin, Indiana, and Illinois, suspends federal rules requiring the sale of low Reid Vapor Pressure gasoline during the summer months.
Higher RVP fuels evaporate more easily and are linked to ozone pollution and smog.
The waiver applies through Aug. 20, the EPA said. It comes in response to requests from governors of the four states.
Wholesale and retail gasoline prices have surged in the Chicago market as a result of the refinery outage. The Chicago market is the main hub for trading of refined products in the Midwest.
Gasoline stockpiles in the U.S. Midwest declined by 2.3 million barrels over the past two weeks to 45.81 million barrels by July 26, the lowest since November.
Analysis:
The EPA's emergency waiver in response to the Exxon Mobil refinery shutdown has led to a surge in gasoline prices in the Midwest, particularly in the Chicago market. This is due to the suspension of federal rules requiring the sale of low Reid Vapor Pressure gasoline, which has caused a decline in gasoline stockpiles in the region. As a result, consumers may experience higher fuel costs and potential impacts on air quality due to the use of higher RVP fuels. It is important for residents of Michigan, Wisconsin, Indiana, and Illinois to monitor the situation and adjust their finances accordingly during this period of fuel shortages.