Citgo secures U.S. government's maritime waiver amid fuel crunch

Holding tanks are seen in an aerial photograph at Colonial Pipeline's Dorsey Junction Station in Woodbine, Maryland, U.S. May 10, 2021. REUTERS/Drone Base

WASHINGTON, May 14 (Reuters) - The Biden administration granted oil refiner Citgo Petroleum a maritime shipping waiver allowing it to move fuel between U.S. ports on a foreign flagged vessel, two sources told Reuters on Friday, making it the second company to secure one this week.

The waivers are intended to help ease distribution of fuel after a major pipeline serving the U.S. East Coast was forced shut by a cyberattack last week, triggering widespread shortages of gasoline, diesel and jet fuel.

The Department of Homeland Security had announced the second waiver on Friday, but did not name the recipient.

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Citgo [RIC:RIC:PDVSAC.UL] is planing to use Jones Act waiver to ship approximately 200,000 barrels of jet fuel, gasoline and ultra low sulfur diesel from Lake Charles, Louisiana, to Linden, New Jersey, on a foreign flagged vessel, the two sources said.

Citgo declined to comment.

Valero Energy(VLO.N) had received the initial waiver, Reuters reported yesterday, and also was moving fuel from Lake Charles to the East Coast. read more

The Jones Act requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crews, a law intended to protect the U.S. shipping industry.

Giving waivers to the Jones Act is one way the government can help fuel supplies reach some areas hardest hit by the pipeline outage, as pump prices continue to surge.

Privately owned Colonial Pipeline Co (COLPI.UL) began to slowly restart the nation's largest fuel pipeline network on Wednesday after a ransomware attack shut the line May 7.

But the process of getting supplies back to normal is expected to take several days. read more

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Reporting by Susan Heavey, Editing by Franklin Paul

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Reports on oil and energy, including refineries, markets and renewable fuels. Previously worked at Euromoney Institutional Investor and CNN.