Projo Biz Blog

Biodiesel is also used to heat homes in the state. But the legislation, if passed by the House and signed by the governor, would not mean a savings for homeowners because home use of the fuel is not taxed.

The motor fuel is available in at least three pumps throughout the state, including the truck stop at Exit 5 off of Route 95, where if often sells for less than regular diesel.

This would mark the second time the legislature has tried to give favored treatment to the home-grown fuel.

A few years ago, the assembly passed what it thought was a similar bill, but the state Division of Taxation ruled that the law only applied to products that were pure biodiesel.

Because producers have to add at least a little petroleum diesel to the mix to be eligible for a federal tax credit, that meant none of the Rhode Islander producers were eligible for the state tax break.

"We were certainly disappointed when it was interpreted the way it was," Standish said.

Cutting the 30-cents-per-gallon sale tax will not mean a 30-cent-per-gallon savings for consumers.

That's because most biodiesel still contains 80 percent petroleum diesel. Thus, the actual savings will only be about six cents per gallon, said Standish. A 50-50 blend would cost 15 cents less per gallon.

Both companies said business was good, even with the extra tax, when petroleum prices were going through the roof. The per-gallon price of diesel vehicle fuel topped $4.95 in July. Last week, the typical price had plummeted to $2.45.

"We were a buck less per gallon when the price was crazy," said Mason. "It's pretty hard to beat the price of conventional diesel as it stands right now."

"But," he predicted, "that won't last long" because fuel prices are on their way back up.

"It's been a difficult six months given the dramatic fall in oil prices," said Standish. "We've been forced to focus on our efficiency and cost cutting. But that doesn't make us unique. That's what everybody has done."

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