WASHINGTON, DC -- According to Reuters, the U.S. Congress is not planning to lift import duties on ethanol from countries such as Brazil, which means drivers may be the ones feeling the pain at the pump during the summer months.

“U.S. oil refineries will need more ethanol to mix with their gasoline as they stop using the fuel additive MTBE, which has been banned by many states and resulted in lawsuits for polluting drinking water supplies,” writes the news source, adding that the U.S. Energy Information Administration (EIA) says the current transition to ethanol “caught some oil companies off guard” that were planning to eliminate MTBE at a later date.

U.S. ethanol production currently averages 275,000 barrels a day, but according to the EIA, the U.S. will could need another 130,000 barrels a day to replace MTBE.

According to EIA, writes Reuters, “The East Coast, particularly Maryland, Delaware, Washington D.C. and Virginia, and the Texas cities of Houston and Dallas, may face tight gasoline supplies and higher fuel prices this summer for reformulated gasoline (RFG) blended with ethanol.”

Yesterday Sen. Saxby Chambliss (R-GA), head of the Senate Agriculture Committee, told Reuters that Congress “has no plans to consider tariff cuts” thus far in 2006, but that such a move is not out of the question. 

“We'd be foolish not to consider it…if it benefits the energy community, particularly if at the same time it benefits our farmers,” said Chambliss.

The news source notes that Brazil is second to the United States in world ethanol production; however, its U.S. exports “are slapped with a 2.5 percent ad valorem tariff and a second duty of 54 cents per gallon.”

Meanwhile, U.S. Agriculture Secretary Mike Johanns told Reuters he has not discussed lifting Brazil’s ethanol tariff.

“The industry is aggressively ramping up. We are going to do everything we can to be helpful on that effort…it seems to me the U.S. industry is doing everything it can to respond" to rising demand, Johanns told the news source.

According to the Renewable Fuels Association (RFA), even though its members are unlikely to meet the ethanol demand at home, ethanol producers are not in favor of lifting the tariffs on Brazil.

“The oil companies have accelerated their removal of MTBE and that's putting quite a strain on domestic (ethanol) producers,” RFA President Bob Dinneen told Reuters, adding, “We're adding as much (production capacity) as we can, as fast as we can. But I don't think anybody anticipated refiners would be hemorrhaging MTBE as quickly as they are.”

Dinneen told the news source that supply problems are no reason to lift duties on Brazilian ethanol imports, “as the Brazilian government already subsidizes its domestic ethanol producers.”

“The Brazilians would love to have us subsidize their product (by easing our duties). But I don't see a serious effort to do that in the Congress,” Dinneen added.