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The Jones Act Is Driving Up US Fuel Prices
The Jones Act, a 1920 maritime law, mandates that shipments between US ports must use American-built, owned, and crewed ships. While intended to protect US shipping, this law has become a major driver of high fuel prices, especially on the East Coast. Recent research shows that repealing the Jones Act could slash gasoline prices by $0.63 per barrel, jet fuel by $0.80, and diesel by $0.82—saving consumers billions.
What Is the Jones Act?
The Merchant Marine Act of 1920 (Jones Act) was designed to support the US maritime industry. It requires:
– American-owned and built ships for domestic transport.
– US crews for all domestic shipments.
Proponents argue it strengthens national security, but critics say it creates inefficiencies and raises costs.
Why the Jones Act Makes Fuel More Expensive
East Coast consumers pay more for fuel because of:
– Limited Jones Act-Compliant Ships: Only ~90 tankers exist, many outdated.
– Higher Shipping Costs: Domestic rates are 2-3x more expensive than foreign shipping.
– No Foreign Competition: Foreign tankers cannot move fuel between US ports, forcing reliance on costly US vessels.
The Real Cost of Protectionism
- Gulf-to-Northeast shipping costs $5-$6 per barrel on Jones Act ships vs. $2 internationally.
- East Coast fuel shortages worsen during hurricanes or refinery outages due to shipping bottlenecks.
How Much Could Consumers Save?
If the Jones Act were repealed:
✅ Gasoline: –$0.63/barrel
✅ Jet Fuel: –$0.80/barrel
✅ Diesel: –$0.82/barrel
These savings could mean:
– Cheaper gas prices
– Lower airline tickets
– Reduced freight costs
Who Supports the Jones Act?
- US shipbuilders & maritime unions (protects jobs)
- National security advocates (ensures domestic fleet)
But critics say the economic harm outweighs benefits, especially for Puerto Rico and Hawaii, where prices are sky-high due to shipping restrictions.
Growing Calls for Reform
Proposals include:
1. Exempting fuel shipments to lower energy costs.
2. Allowing foreign ships in emergencies to prevent shortages.
3. Full repeal to boost competition.
Even Presidents Trump and Biden have criticized or waived the law temporarily, recognizing its inflationary impact.
The Bottom Line: Time for Change?
The Jones Act was meant to protect US shipping, but its high costs and inefficiencies hurt consumers. With fuel prices a major concern, pressure to reform or repeal the law is growing.
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