East Coast Gas Would Only Drop a Dime If Jones Act Lifted, Says JPMorgan

gas price

Waiving a century-old shipping law to let foreign-flagged vessels transport fuel between US ports — a favorite talking point of a US refinery sector trying to get the White House off its back — would only save East Coast drivers about 10 cents a gallon at the pump, JPMorgan said.

A potential waiver of the Jones Act is one of several tools the Biden Administration is weighing to reduce the effects of record energy costs for Americans. However, like most moves being considered by lawmakers, it’s unlikely to bring sustained relief.

A 10 cent per gallon cut would be about 2% of the current average New York state pump price, according to auto-club AAA. Pump prices in the US mounted a record rally since the beginning of the month until they dipped slightly this week. At $5 a gallon, the national average is still more than 60% higher than a year ago.

“Unfortunately for US drivers looking forward to hitting the road this summer after two years of lockdowns, the tools at the Administration’s disposal which might help lower fuel prices are likely limited in both number and potential impact,” JPMorgan Chase & Co. analysts including Natasha Kaneva said in a note.

It currently costs around $4.66 per barrel to move fuel from the US Gulf Coast to New York Harbor on a Jones Act-compliant vessel, according to data from price reporting agency Argus Media. A non-Jones Act ship for a similar route is nearly $1 per barrel cheaper as of earlier this week, according to Argus.

About Stu Turley 1817 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience in implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor in this space. Stuart has led the “Total Corporate Digital Integration” platform at Sandstone and works with Sandstone clients to help integrate all aspects of modern digital business. He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage and is the Co-Host of the energy news video and Podcast Energy News Beat. Stuart is on Board Member of ASN Productions, DI Communities Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.