Shrimp boats along the Gulf Coast are gearing up for the new season, but some of them may still be tied up in an empty tank. Some vendors in Bayou La Batre, Alabama said the price of gasoline is too high for their usual months-long shrimping trip.
BAYOU LA BATRE, Alabama — Many American shrimpers keep their shrimp boats with an empty tank before the fish season as high fuel prices and tax refunds hit the industry with a “double whammy.”
Rising diesel prices – driven in part by political tensions affecting global oil supplies – are putting pressure on shrimpers who rely heavily on the fuel to operate. At the same time, the dispute over tax refunds is adding financial pressure to the entire industry.
Some shrimp boat owners in Bayou La Batre, Alabama, like Joseph Rodriguez, are looking to developments in the Middle East as the Strait of Hormuz remains closed as conflicts continue in the region. Before the conflict, about 20 percent of the world's oil went through the Strait.
“We definitely depend on the price of fuel, which we cannot control at all,” said Rodriguez.
FEDERAL RESERVE LEAVES INTEREST RATE UNCHANGED AS POWELL'S PRESIDENTIAL END
Some American shrimp workers are making repairs to their boats while they wait for gas prices to drop. (FOX News / Fox News)
Iranian officials said on Monday they would consider reopening the conflict if the US lifted the embargo on its ships and ended the conflict. The Trump administration has rejected the proposal, citing Iran's refusal to halt its nuclear program.
“It's going to make it very difficult to make any kind of profit at all,” Rodriguez said.
Some fish workers are using the time off to repair vessels while they wait for fuel prices to drop.
Meanwhile, gasoline prices in the United States continue to rise. AAA reported that a gallon of diesel cost an average of $5.46 on Tuesday, about $2 more than a year ago.
Rodriguez built “Little Andrew,” a 27,000 gallon diesel shrimp boat, in 2001. He said the ship recently burned about 12,000 liters during the 37-day journey.
AIR CANADA DRAWS KEY ROUTES AS FUEL PRICES FIRE Amid Iran Conflict
The Southern Shrimp Alliance said fuel costs “often account for more than 50%” of total shrimp operating costs, warning that higher prices could limit access to sustainable shrimp stocks on US shores.
Rodriguez, like several other traders on the Gulf Coast, said he supports US strikes on Iran and expects oil prices to eventually drop once the Strait of Hormuz is reopened.
“We're going to ride with it for a while because it has to be done,” said Rodriguez. “I believe that fuel prices will return to normal in the near future.”
Shrimp workers take out their boats for weeks at a time, often burning about 12,000 gallons of diesel. (FOX News / Fox News)
In addition to fuel costs, shrimpers are raising concerns about tax returns following the recent Supreme Court ruling.
In February, the US Supreme Court ruled that President Trump's tariffs on American consumers were illegal. The SSA said the US generated $902.7 million in foreign tax revenue. The American government is giving it back to foreign companies even though American traders want that money back to domestic traders.
Industry groups argue that the refund benefits foreign suppliers more than domestic producers. About $450 million of the repatriated money is expected to go to India alone, according to the SSA.
CHEVRON CEO WARNS AVIATION DIVERSITY COULD WORSE AS JET FUEL CRUNCH TURNS
“They should put it in a fund to help the local sellers in some way,” Rodriguez said. “We are competing with the Chinese government, for God's sake, a communist country. We are competing with them for their purchase of shrimp.”
US retailers say higher fuel prices and tax refunds are a 'doublewhammy.' (FOX News / Fox News)
Rodriguez urged consumers to buy American shrimp instead of imported products, calling it “the biggest hope for the industry.” He also said that shrimps imported from other countries are at high risk of infection by viruses or animal drugs used during production.
CLICK HERE FOR FOX BUSINESS ON THE GO
“You'd be surprised at some of the high-end restaurants that serve shrimp, which often fly miles away from me,” Rodriguez said.
