After the government’s recent shutdown, a spending bill was passed on February 9 to end the temporary shutdown and included a provision to reinstate the Oil Spill Liability Tax (OSLT) for 2018, which expired at the end of 2017. Section 40416 of HR 1892 reinstates the OSLT effective March 1, 2018, with a new expiration date of December 31, 2018.
So, what does this mean for wholesale petroleum marketers?
According to PMAA.org Weekly Review for the week of February 9, “the 9 cents per barrel OSLT tax is imposed on crude oil at the refinery gate. Proceeds from the OSLT go into a trust fund used by the Coast Guard to pay for clean-up after accidents like oil spills.”
Although the OSLT doesn’t really have a major impact on downstream petroleum marketers, it is reflected as a pass-through cost on finished product but paid for by the refiner upstream. Petroleum marketers are not required to include the federal OSLT as a line item on an invoice or bill of lading. However, “the suppliers who have included the tax as a separate line item on their invoices to wholesale petroleum marketers will need to refund the line item taxes collected from marketers.”
It’s unlikely wholesale petroleum marketers will recoup the losses, but we encouraged you to contact your supplier to find out if they will be charging the fee retroactively now that the OSLT has been reinstated.
WPMA will be keeping an eye on this and other industry related new. Check our website regularly for association updates, industry news and trends!