(Reuters) - Wall Street banks, including JPMorgan
A JPMorgan trader pressed the bank to buy all the Renewable Identification Numbers (RINs) it could, The Times said citing an unnamed industry executive. Prices for the credits spiked by as much as 20-fold between January and mid-summer.
The Times reported that JPMorgan's role and that of other banks in the RINs market has hurt U.S. refineries that often must acquire RINs to avoid stiff penalties from the U.S. Environmental Protection Agency (EPA). The banks' trading in the RINs market likely contributed to higher gasoline prices at the pump, the report said.
With the supply of available RINs growing tighter, JPMorgan offered to sell hundreds of millions fuel credits to refiners this year, The Times reported.
JPMorgan spokesman Brian Marchiony told Reuters by email that the bank did not offer to sell that volume of fuel credits and holds only a "marginal" inventory of RINs, or just enough to comply with its own requirements in the fuel market.
Throughout 2013, Marchiony added, the bank's RINs inventory has never a exceeded an estimated 0.001 percent of the total, 14 billion gallon ethanol RIN market.
U.S. refiners and gasoline importers must generate or buy RINs to comply with EPA rules requiring they blend growing quantities of ethanol into gasoline supplies. RINs prices spiked from 7 cents in January to a high of $1.43 this summer, before retreating to 60 cents, the newspaper said.
The price spike has saddled U.S. refineries with huge bills and refiners have passed along the higher costs to consumers, the report said.
Independent refiner Valero Corp
(Reporting by Joshua Schneyer; Editing L Gevirtz)