Major US carriers face fuel price hike
- Latest News
- Thursday, 10 November 2016
Major US airlines including Delta, United and American are awaiting the outcome of a bid by a fuel pipeline operator to stop shipping a 'dirtier blend' of jet fuel.
The Colonial system carries most of the jet fuel delivered via pipeline to US airlines in New York, Washington DC and Atlanta.
The pipeline company said earlier this month it would ask the Federal Energy Regulatory Commission for permission to halt shipments of high-sulfur jet fuel and diesel.
Jet fuel prices could rise significantly if Colonial wins approval, said John Heimlich, chief economist for the industry trade group Airlines for America (A4A) - and might make some services unprofitable.
The move would allow Colonial, which daily ships more than three million barrels of petroleum products, to move more low-sulfur products through its pipeline.
Cutting down on dirtier fuels also would reduce so-called "transmix," which occurs when high-sulfur and low-sulfur products are combined. The resulting mixture has to be refined or blended again.
Colonial's plan is driven by waning demand for high-sulfur fuels. Railroad and marine transportation companies, for instance, are using less high-sulfur diesel fuel because of new environmental regulations.
