The Tribune

A RULING by the US Customs service could bring a financial boom to The Bahamas.

The Bahamas Oil Refining Company (BORCO) oil storage hub in Freeport stands to benefit from the ruling, which will allow foreign vessels to ship fuel to the US.

The March 6 judgment in favor of Buckeye Partners LP, which owns the hub, allows traders to use lower-cost foreign ships to transport fuels between the Gulf and East Coast via BORCO, circumventing an old law called the Jones Act.

That law requires US-made fuels to be moved between domestic ports using a tiny fleet of ships that are flagged and built in the US and have US crews. It costs three times more to transport with Jones Act ships than with foreign-flagged ships.

In its ruling, Customs said traders may export to the Bahamas certain blending components of gasoline on a foreign-flagged vessel and ship it back to the US on a foreign-flagged ship if it is blended to produce the gasoline grades RBOB and CBOB.

The ruling states the blending must create a “new and different product” for it to be eligible for re-export to the United States on a foreign-flagged ship.

Going via the Bahamas would be “a hell of a lot cheaper” than using a Jones Act vessel, said Jerry Lichtblau, director of research at True North Chartering in Wilton, Connecticut.