Fuels

Feds Prioritize Fuel Amid Coronavirus Outbreak

Restrictions on hours of service waived to protect supply against 'rush to the pumps'
Photograph: Shutterstock

WASHINGTON — The federal government has expanded its emergency declaration that waives hours-of-service (HOS) regulations to fuel haulers as the coronavirus pandemic strains supply chains across the country.

On March, 13, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) issued a national emergency declaration that waived HOS requirements to commercial vehicle drivers who are transporting emergency relief in response to the coronavirus pandemic. At the time, the declaration applied to operators who supplied medical and healthcare supplies, food, supplies for temporary housing and quarantine facilities, and personnel who provide medical or other emergency services, but it did not include fuel haulers. During natural disasters such as hurricanes and floods, HOS waivers are typically granted to fuel haulers on the state level.

In a letter sent March 17 to James Mullen, acting administrator of the FMCSA, four fueling industry groups—NACS, PMAA, SIGMA and NATSO—urged the agency to provide a national HOS waiver for the transportation of fuel.

“Fuel is a key component of the supply chain and therefore crucial to ensuring supplies reach their destination,” the letter says.

“We support the HOS Waiver for the delivery of essential supplies critical to supporting public health during this crisis. Without access to fuel, however, manufacturers are unable to provide supplies to hospitals, businesses and homes. Moreover, workers at essential businesses—including first responders and hospital workers—need fuel to get to their jobs. In addition, emergency response vehicles need uninhibited access to fuel.

“In some states, our members have already started to see consumers rush to the pumps, which can disrupt access to fuel for those who need it most,” the letter says. “Issuing a nationwide HOS Waiver for the transportation of fuel will help mitigate a broader run on fuel.”

The letter to FMCSA also cites a national shortage of truck drivers in asking for an HOS waiver for fuel transport: “Losing drivers due to illness or quarantine will only amplify the shortage of drivers, making a nationwide HOS Waiver for the transportation of fuel even more necessary.”

On March 18, the FMCSA released an expanded emergency declaration that extended the regulatory waiver to commercial motor vehicle operations that provide direct assistance to support COVID-19 emergency relief efforts, including transportation that meets an immediate need for fuel. It does not include routine commercial deliveries. The declaration expires April 12, 2020.

Demand Destruction

Rob Underwood, president of PMAA, Arlington, Va., said while there had been some reports of panic buying and fuel shortages in states such as Florida over the past few days, "there are no fuel shortages being reported right now."

"Most of the concern is over potential driver/distribution shortages due to illness and quarantine," he told CSP Daily News. "We want to get out ahead of a potential issue." 

In Colorado, which has more than 180 confirmed cases of COVID-19, the Colorado State Patrol has relaxed HOS regulations because "both the coronavirus as well as crashing gasoline prices [have] led to extremely long lines at terminals," Underwood said.

In a story about COVID-19 panic buying, Reuters reported that "some gas pumps ran dry" in Austin, Texas; however, Paul Hardin, president and CEO of Texas Food & Fuel Association, told CSP Daily News that there are no fuel shortage issues in the state.

“I have spoken to several fuel distributors in the state, and all are operating normally,” he said. He said a terminal in East Texas is on allocation, “but beyond that, all are operating normally.”

“There is no shortage of fuel,” he repeated. “Rumors are what starts the panic buy, and if consumers stick to their normal buying habits with fuel—and everything else, for that matter—we won’t experience an issue.”

If anything, the coronavirus outbreak is expected to depress fuel demand among end users as more people practice social distancing, including working from home and avoiding unnecessary travel. Reuters reported that the combination of fewer car and plane trips could cut U.S. petroleum demand by as much as 2.5 million barrels per day and slash motor-fuel consumption in 2020 by about 300,000-400,000 bpd.

This decline is expected despite the United States heading into its peak summertime travel period and falling gasoline prices. In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration adjusted its retail price forecast for 2020 downward, and it expects regular-grade gasoline to average $2.14 per gallon compared to the $2.60-per-gallon average in 2019. It expects the national average to drop below the $2 mark to $1.97 per gallon in April and then rise to an average of $2.13 for the summer months of June, July and August.

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