Counterintuitively, phasing in the regulation could raise costs on American consumers rather than reduce costs as the administration intends. It’s smarter to let the rules go into effect as scheduled.
The Trump administration fears the regulation will cause demand for diesel, heating oil and other low-sulfur fuels to surge, resulting in “precipitous fuel cost increases on consumers.” It also worries shipping companies will abruptly raise prices on imported goods to offset their higher fuel costs. Fortunately, these sudden price hikes aren’t likely. The oil industry has known about the regulation, commonly called IMO 2020, for roughly a decade.
In other words, the free market is working. Companies had plenty of advanced warning about the new regulations and they proactively adapted to prevent any market distortions.
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