Citgo Petroleum said Wednesday it will deliver gasoline from its 197,917 b/d Lemont, Ill., refinery to New York using Buckeye Partners' Laurel Pipeline, marking the first time Midwest-produced transportation fuel is shipped to East Coast markets.

On Sept. 1, Buckeye said it would immediately begin Laurel Pipeline's bi-directional service allowing west-to-east refined product movement from origin points in Michigan, Ohio and western Pennsylvania to markets in New York and eastern Pennsylvania.

"By connecting Midwest refining capability with East Coast demand, the new service will provide an additional pathway for Citgo transportation fuels to reach key markets," Citgo said.

Karl Schmidt, Citgo's vice president of supply and marketing, said in a statement that the new pipeline service provides an option to the company's supply system, allowing Citgo to move fuel to meet customers' demand.

The new pipeline service, allowing relatively cheaper Midwest refined products to reach the densely populated Northeast markets, comes at a time when Middle East supply disruptions have most likely reduced gasoline exports from Europe and Eastern Canada to the U.S. East Coast.

Buckeye has offered up to 80,000 b/d of incremental capacity from the Midwest and western Pennsylvania to markets in eastern Pennsylvania and Upstate New York as well as New York Harbor. The company said it has received strong interest for its service.

The Northeast region currently has only five oil refineries, located in New Jersey, Pennsylvania and Delaware. A devastating 2019 fire permanently shut the 335,000 b/d Philadelphia Energy Solutions refinery in southern Pennsylvania, historically the largest East Coast refinery.

As Northeast refining capacity decreases, Laurel Pipeline's new bi-directional service allows refined products to reverse its traditional flow from east to west.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

-- Reporting by Frank Tang, frank.tang@dowjones.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

At least eight states have taken steps to reduce fuel costs as the Trump administration weighs measures to boost domestic diesel supplies and lower pump prices ahead of the midterm elections.

War-related global supply disruptions have pushed diesel prices higher.

According to OPIS, the national average retail diesel price stood at $6.4139/gal on Wednesday, down from a record $6.5276/gal on Sept. 22.

So far, six states have expanded dyed diesel use or eased fuel restrictions, while others have suspended fuel taxes or relaxed transportation requirements.

The Massachusetts legislature is considering a two-month pause in fuel taxes and Ohio lawmakers are considering a three-month fuel tax holiday.

The Trump administration has considered options including voluntary export limits and expanded use of red-dyed diesel, a generally tax-exempt fuel restricted to off-road use. No export restrictions have been implemented.

Energy Secretary Chris Wright has said an outright ban could force refiners to reduce crude runs as diesel storage fills, potentially cutting gasoline and jet fuel production and increasing prices for those fuels.

The Federal Motor Carrier Safety Administration on Sept. 16 issued a 90-day hours-of-service waiver for interstate drivers hauling gasoline and diesel through Dec. 16. The waiver allows eligible drivers to drive up to 16 hours during a 24-hour period, subject to rest and safety requirements. FMCSA said the measure is intended to provide additional flexibility amid global supply disruptions and increased seasonal fuel demand, including from agricultural harvesting.

Texas Gov. Greg Abbott on Monday declared a statewide disaster expanding dyed diesel use on public roads and increasing allowable weights for fuel, agricultural and timber loads. The proclamation also suspends Texas Low Emission Diesel (TxLED) requirements to the extent authorized by the Environmental Protection Agency. Separately, Abbott asked EPA to temporarily waive federal ULSD requirements and applicable Texas diesel standards. Dyed diesel is exempt from state taxes and only used off road. The proclamation doesn't waive the underlying fuel tax.

Alabama Gov. Kay Ivey temporarily stopped enforcement of dyed diesel restrictions for 120 days starting Sept. 24 to expand use of the tax-exempt fuel during harvest season. Ivey also directed the Alabama Department of Revenue to seek federal penalty relief from the IRS from federal taxes.

Louisiana Gov. Jeff Landry on Sept. 23 also permitted farmers and timber harvesters to use dyed diesel in certain registered highway vehicles through Oct. 22. The state said its diesel average had reached a record $6.03/gal when the order was announced.

Oklahoma Gov. Kevin Stitt on Monday paused enforcement of taxes, regulations and fines related to red-dyed diesel used in farm vehicles for 120 days. Stitt also directed the Oklahoma Tax Commission to seek federal dyed-diesel penalty relief from the IRS.

North Dakota Gov. Kelly Armstrong on Tuesday declared a diesel emergency, temporarily expanding red-dyed diesel use to licensed vehicles used in agricultural operations through Nov. 30. North Dakota taxes regular diesel at 23cts/gal and red-dyed diesel at 4cts/gal, so the order reduces taxes by 19cts/gal.

Nebraska Gov. Jim Pillen on Sept. 24 issued two executive orders allowing highway-registered vehicles to use untaxed dyed diesel without state penalties and providing temporary weight-limit relief for agricultural transportation. The dyed diesel provisions are in effect for 90 days. Pillen also asked President Trump for a 90-day pause on U.S. diesel exports, saying the action could allow domestic inventories to rebuild and reduce costs during harvest season.

Georgia Gov. Brian Kemp on Monday declared a state of emergency, suspending the state's motor fuel excise tax for 30 days from Sept. 29 through Oct. 29. The order also suspends state weight limits for commercial vehicles.

South Dakota Gov. Larry Rhoden on Monday issued an executive order allowing vehicles hauling crops, livestock and other agricultural commodities to operate up to 10% above normal weight limits and suspending a $25 overweight trip permit, among other provisions.

Illinois, Kentucky and Utah provided tax relief earlier this year.

Illinois suspended a scheduled inflation adjustment to its motor fuel tax from July 1 through Dec. 31. The state's rates remain 48.3cts/gal for gasoline and 55.8cts/gal for diesel during the period.

Utah reduced its gasoline tax to 31.9cts/gal from 37.9cts/gal effective July 1 through Dec. 31. The one-time reduction, however, doesn't apply to the state's diesel tax.

Kentucky Gov. Andy Beshear in May temporarily reduced the state's motor fuel tax by 10cts/gal and froze a scheduled July increase. The 10cts/gal reduction initially applied statewide until June when it was extended only in communities that requested continued relief.