Fuel processors in US are pressing the Environmental Protection Agency (EPA) to narrow down the percentage of ethanol to be blended in gasoline due to the sharp increase in ethanol credits.
Several companies, including Valero Energy and CVR Energy, have claimed that consumers could face a $13bn increase in gasoline prices if the government fails to lower the stipulated amount of ethanol blend.
As per the federal laws, fuel processors are required to blend over 10% ethanol in the fuel, reported Bloomberg.
Companies often opt for bio-fuel credits, Renewable identification Number (RIN) as a way out rather than blending ethanol.
The price of these federally-mandated ethanol credits has however soared 10-fold to $1.08 when compared to $0.07 cents in January 2013.
At an annual gathering of American Fuel and Petrochemical Manufacturers, Valero chairman and CEO Bill Klesse remarked that the gasoline blending companies were resorting to hoarding the credits expecting the prices to soar further.
"You have traders hoarding. The EPA has to address it and address it now," urged Klesse.
CVR Energy CEO Jack Lipinski added, "The intent of the law was to assure ethanol was blended. RINs should not be a separate profit center."
The companies have urged the government to check on blenders for minimum ethanol usage, claiming that it is likely to lower the RIN prices.