Prior to January 2005, ethanol blends were taxed at different rates reflecting tax exemptions for various blend percentages of ethanol in gasoline. Effective January 1, 2005, the Federal Excise Tax was set at 18.4 cpg (including LUST tax) and an ethanol tax credit was given to the blender/supplier. The blenders credit is the same amount as the previous tax credit based on ethanol percent of the blend.
Suppliers are passing the blender’s credit to their customers by a separate line item credit on their product invoice. OPIS provides CFN the average posted prices used for CFN settlement of Foreign and Remote transactions adjusted to reflect the blender credit. We think this more accurately reflects the fair market value for what product is being bought and sold in the marketplace. It is the rack supplier’s option to pass the credit on to their customers. Participants are responsible to notify CFN of any changes to this practice.