Colonial Oil Executives Plan Visit to Washington, D.C., in an Effort to Reduce Local Fuel Prices

Savannah company Colonial Oil is going to Washington, D.C. in an effort to help lower gas prices around town.

News Release from Colonial Oil, March, 2013

(SAVANNAH, GA)  Savannah residents who are fed up with paying high prices at the gas tank may have some relief in sight thanks to a long-time local company. Colonial Oil is taking its case to Washington, D.C. to fight for changes to outdated laws that are preventing Savannahians from seeing lower gas prices around town.

“As a third generation local Savannah family business, we’re heavily invested in Savannah and care a great deal about the community and its prosperity,” says Robert H. Demere, Jr. CEO and President of Colonial Group. “We don’t own the first drop of crude oil, so we’re completely aligned with the consumer in wanting low fuel prices. Next month, we’re visiting lawmakers in Washington, D.C. to make that happen.”

A group of Colonial Oil executives will travel to the nation’s capitol in April to meet with lawmakers and organizations to urge them to amend the Merchant Marine Act of 1920, better known as the Jones Act, a maritime commerce law that puts restrictions on vessels that carry goods between U.S. ports. The law mandates, among other things, that goods must be transported in ships that were constructed in the U.S. and owned and staffed by U.S. citizens.

“The Jones Act chokes off Savannah’s ability to take advantage of the cheapest gasoline in the world, which is produced domestically right here in our own Gulf Coast,” Demere explains. “What’s worse, the Jones Act actually works to encourage exports to Central and South America over Savannah and the rest of the East Coast. As a result, Savannahians aren’t able to take advantage of the U.S. energy boom— all because of government red tape.”

Many Savannah residents complain that gas prices are lower in other Georgia cities such as Atlanta and Macon. The reason for the lower prices, says Ryan Chandler, vice president of business development at Colonial Group Inc., is that those markets have access to a pipeline supply direct from the U.S. Gulf Coast.

“Savannah is forced to pay what amounts to a Jones Act penalty to bring gasoline and diesel in from the Gulf Coast, if there are even ships available to carry the cargo,” Chandler explains. “When Jones Act ships aren’t available, Colonial is forced to import gasoline and diesel from foreign markets to meet Savannah’s needs. The whole East Coast is facing this dilemma.”

Chandler notes that many consumers often don’t realize the costs that comprise the retail price of gasoline: approximately 72 percent for crude oil, 13 percent for the government, and 8 percent for the refinement process. The remaining 7 percent must cover the cost of infrastructure, employees and services that support transportation from the refinery, regional storage and distribution, and retail fuel station operations before gasoline finally finds its way into the consumer’s vehicle.

“If the Jones Act were amended to allow the use of the most economical ships in the market for the transportation of domestic energy, we’d immediately shave between $.07-$.10 per gallon off the cost of gasoline in Savannah,” says Chandler, who points out that the savings per gallon could even increase since the average cost of Gulf Coast gasoline last year averaged more than $.14 per gallon less than the East Coast’s supply.

The Colonial Oil executives who visit Washington, D.C., plan to voice their concerns with members of the Independent Fuel Terminal Operators Association and with Grover Norquist, a long-time supporter of reducing government red tape, particularly in the area of energy. In the meantime, the company urges Savannah residents to write to their congressmen to demand a change.

“Tell your congressmen that consumers can’t afford to pay a Jones Act penalty to gain access to the U.S.’s cheap domestic energy supply,” says Demere. “The Act needs to be amended to allow the most economical transportation of domestic energy available, period.”

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About Colonial Group:

A third generation family company founded in 1921, Colonial Group, Inc. (“Colonial Group”) is a diversified energy and port-related company, ranking #64 on Forbes List of America’s Largest Private companies with over 900 employees. Its history is rooted in the marketing, retailing, and distribution of petroleum products for the transportation, industrial, and marine applications. Over the years, its offerings have grown to include natural gas storage and marketing, liquid and dry bulk terminaling, retail fuel & ENMARK convenience stores, industrial chemical supply & distribution, and marine vessel safety and compliance consulting. For more information on Colonial Group, Inc., please call 912-236-1331 or visit www.colonialgroupinc.com

ATR: Repeal the Jones Act, Reduce the Price of Gasoline