National Taxpayers Union (NTU) and 27 other free-market organizations on Thursday announced a letter to President Trump urging against a ban on exports of diesel fuel because it would weaken the incentive to maximize production and prevent additional refining capacity from coming online.
Instead, Congress should meaningfully bring down fuel prices by approving comprehensive permitting reform that gets rid of excessive refining approval requirements and lengthy processes that have held off new refinery construction in the U.S. for more than 50 years, according to the letter.
“Export bans are a failed idea from the Biden era that will ultimately raise both diesel and gasoline prices. The Administration should take this counter-productive policy option off the table and focus on serious reforms to address the root cause of high energy prices,” NTU Vice President of Federal Affairs Tommy Aiello said. “By far the best way to drive prices down and ensure American energy dominance is to bring more production to market, which includes the global market.”
The letter points out that, far from reducing prices, some regions could actually see an immediate and sharp increase in diesel prices from an export ban, potentially muting a decline in the national average in diesel prices. Furthermore, as refiners adjust to the loss of export markets and a disruption to supply chains, any positive initial price effects would likely fade, potentially leaving consumers facing higher prices as the market absorbs the disruption.
“It’s important to note that the U.S. exports more diesel than what Americans use,” Aiello said.
As Americans continue to struggle with high gas prices, a diesel export ban would also have ripple effects that could also increase pain at the pump, since a ban would create a glut of diesel that would sit in storage tanks. When those tanks become full, refiners will stop refining as much because there’s no place to put the refined product. Fewer production runs from refineries will mean less supply, which in turn would raise prices, Aiello noted.
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