U.S. refiners give mixed reviews of GOP-backed border tax plan
By Jarrett Renshaw
NEW YORK (Reuters) - U.S. independent refiners like Phillips (PSX.N: Quote) and Valero (VLO.N: Quote) have offered mixed support for Republican efforts to boost American jobs and products, expressing concerns about how a border tax on imports could upend the energy ecosystem.
The comments by refining executives in a wave of recent earnings calls offer the first glimpse of the balancing act U.S. refiners must perform under the Trump Administration: Applaud pro-business proposals while raise alarms about protectionist policies that may hurt American consumers and perhaps their own balance sheets.
Congressional Republicans and the Trump administration are considering a basket of tax reforms, the centerpiece of which is a 20 percent tax on imports, to try to drive domestic manufacturing and energy industry growth. The tax would be offset by cutting income taxes on exports.
Refining executives warned the reforms would have significant consequences for the U.S. refining industry that imports around 40 percent of its daily crude oil needs, and the consumer was most likely the one to get hit.
"If it were to pass, we'll be able to be flexible. We'll be able to move the price onto the consumer,” Marathon Petroleum Chief Executive Gary Heminger said.
GAS UP 30-40 CENTS ON BORDER TAX
It is not clear that refineries would easily be able to absorb more U.S. light, sweet crude when many of them are designed to refine heavier grades of oil from Canada and Saudi Arabia. Continued...