Republican Calls for Diesel Export Ban Grow Ahead of Midterms

(Bloomberg) -- A growing number of Republican lawmakers are calling for a ban on diesel exports as the key fuel hits record prices less than two months before the midterms in which the GOP potentially faces steep electoral losses.

Alaska Senator Dan Sullivan, who trailed Democratic challenger Mary Peltola in the first round of voting and is one of the GOP's most endangered incumbents, was the latest to urge the move Tuesday.

Alaska relies heavily on diesel and closely related heating oil. Many remote communities depend on diesel generators for electricity. The climate is harsh, freight moves over long distances and per-capita usage of diesel and home heating oil is more than four times the national average.

US retail diesel prices have climbed above $6.50 a gallon for the first time, hammering farmers across the Grain Belt as they prepare for harvest and truckers across the country.

As prices have risen, more Republicans have embraced the idea of a diesel export ban or even price controls.

Senator Chuck Grassley, the senior Republican senator, repeatedly urged President Donald Trump in social media posts over the weekend to block diesel exports in an effort to cut prices he said were hurting farmers in Iowa.

Sullivan said he favored a diesel export ban until the Iran war is resolved.

"American fuel should stay home with Americans," Sullivan said. "The cost of diesel is just too damn high."

Sullivan said the best way to cut prices is to "produce more energy in Alaska, by Alaskans, for Alaskans."

The rising diesel prices have benefited refiners and their stock prices. Valero Energy Corp., Marathon Petroleum Corp. and Phillips 66 have all seen quarterly earnings per share almost quadruple year-over-year.

But mounting Republican support for an export ban led Jefferies to downgrade Valero and Marathon to hold from buy on Tuesday.

Other embattled Republican Senate candidates who have embraced the idea are former Representative Mike Rogers in Michigan and Representative Ashley Hinson in Iowa. Days earlier, Hinson's opponent, Democrat Josh Turek, called for a diesel export ban as part of his own plan for bringing down diesel prices.

Last week, Senate Majority Leader John Thune told reporters he was open to exploring the idea.