(In third paragraph, corrects amount by which RIN prices were
lower in current quarter to $15 million.)
HOUSTON, April 25 Valero Energy Corp
Chairman and Chief Executive Joe Gorder said he expects costs
for renewable fuel credits to drag on the company's returns in
the second quarter of 2017.
"While RIN (Renewable Identification Number) prices have
declined relative to 2016, there is still a significant headwind
for the quarter," Gorder said in a conference call to discuss
first quarter earnings. "At this level, RINs expense remain an
issue for us, so we continue to work with regulators."
Valero's costs for biofuel blending were $146 million in the
first quarter of 2017, $15 million below blending costs in the
same period of 2016.
During the conference call, Gary Simmons, Valero's senior
vice president of international operations and system
optimization, said the company was not ready to revise its
forecast for RINs for 2017.
"We're not really ready to revise our guidance at this
time," Simmons said. "We're going to keep our guidance where it
is. And we'll just see how successful we are on some of these
things about moving the point of obligation and what happens to
The company has said it expects to spend an amount similar
to the $749 million spent in 2016 to meet the federal renewable
Refiners trade RINs to comply with federal law requiring
transportation fuels sold in the United States contain minimum
amounts of renewable fuels.
D6 RINs traded on Monday between 47 cents and 49 cents a
Valero is part of a lobbying effort to change the point of
obligation where renewable fuels are blended into motor fuels
from the refinery to the distributor's terminal.
(Reporting by Erwin Seba; Editing by Marguerita Choy)