Platts opens consultation on Midwest CBOB gasoline in light of RVP waiver removal in 2025

Platts, part of S&P Global Commodity Insights, is opening a consultation process on its US Midwest CBOB gasoline assessments in light of the expected move in a number of Midwest states to shift to more restrictive RVP on their summer gasoline blendstocks.

The US Environmental Protection Agency issued a final rule in February 2024 that will allow the elimination of the current 1-psi RVP waiver in eight Midwest states for sales of conventional gasoline containing 10% ethanol during the summer, starting in 2025.

The decision will lower the RVP limit for conventional gasoline in these states -- Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin -- to 9 psi during the summer months, compared with the current 10, after blending with up to 10% ethanol.

Initial market feedback suggests that the move could potentially result in Midwest gasoline markets having to supply both the new, maximum 9 RVP premium and regular CBOB for use in the eight states alongside the current standard 10 RVP premium and regular CBOB.

Platts invites market feedback on all aspects related to the removal of the 1-psi RVP waiver, including whether the markets in group 3 and Chicago are likely to see trading of both 9 RVP and 10 RVP premium and regular CBOB during the summer, or whether the new low-RVP CBOB is likely to be the dominant barrel being produced and sold.

With regards to its Midwest gasoline assessments, Platts is specifically inviting feedback on whether it should:

A) Launch new assessments for the new low-RVP premium and regular CBOB in these markets, and continue to reflect 10 RVP premium and regular CBOB in its current assessments, or

B) Reflect the new low-RVP CBOB in its existing Group 3 and/or Chicago assessments.

Additionally, Platts seeks feedback on whether, if it were to launch new assessments for low-RVP premium and regular CBOB [Option A], these assessments should be published year-round or only during the summer months.

Platts has four assessments in the Midwest for standard CBOB and two for premium CBOB, as well as related differentials versus NYMEX futures.

They reflect product delivered in Chicago via pipeline, for a minimum volume of 10,000 barrels.

Since July 2, 2018, the Chicago pipeline assessments have reflected the lowest value between the Badger, West Shore and Wolverine pipelines.

In addition, Platts has published a stand-alone assessment for Wolverine Pipeline since Feb. 1, 2020, but trades on Wolverine continue to be reflected in the Chicago pipeline assessments.

The following assessments are impacted by this consultation and request for feedback:

Details of the Americas gasoline assessment methodology can be found at https://www.spglobal.com/commodityinsights/en/our-methodology/methodology-specifications/oil/americas-refined-oil-products (opens in a new tab)and the corresponding RVP calendar is available at https://dunl.org/c/rvp-calendar/2024 (opens in a new tab).

Please send all feedback and comments by Nov.1 to americas_products@spglobal.com and pricegroup@spglobal.com .

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.

Platts will consider all comments received and will make comments not marked as confidential available upon request.