05/15/2003
In December 2002, the Exchange stopped listing additional months of gasoline futures trading due to changes that will create inconsistent policies regarding gasoline additives between states in the New York harbor area, where the contract is delivered. New York State and Connecticut are scheduled to ban MTBE beginning in January 2004. New Jersey has not adopted a similar ban and state officials have indicated to the Exchange that the state has no plans to changes its standards at this time.
The Exchange has expended a great deal of time, energy, and resources to communicate to federal and state officials its concern over the fragmentation of the gasoline market that will occur over the inconsistencies in state policies for this region. At this point, the Exchange has a responsibility to customers and the marketplace as a whole to provide risk management tools beyond the seven months that are currently listed.
Although the Exchange is concerned that New York consumers will pay the price for the absence of a uniform New York harbor industry risk management tool, the decision to go with the New Jersey standard was made for a wide variety of reasons, including the more widespread use of MTBE outside the immediate area and the greater number of gasoline delivery facilities on the New Jersey side of the harbor. New Jersey officials have also assured the Exchange that, in the unlikely event of any change in plans, the Exchange will be provided with adequate notice.