But the defense department stuck to its guns. In addition, Hawaii's congressional delegation wrote a letter to the Defense Logistics Agency in April seeking an explanation for its move and supporting a withdrawal of the stringent measure. On the surface, the issue seems to be administrative savings for the military is going to cost the government money, and adversely impact Hawaii businesses. But Aucoin and others at the FTZ are unsure if other states or refineries are handling it the same way. Another group within the task force is working with the U.S. Customs department in trying to get the duty repealed.
Efforts are ongoing, and there has been no success yet.
Aucoin notes that after three years of trying, the group is running out of options, now. The DOD issues duty-free certificates to the oil companies in the FTZ, which they in turn hand to the U.S. Customs to avoid paying duty. One of the benefits of operating under an FTZ is that duty on imported crude gets waived for certain types of processed fuel, exports and some sales transactions. Tesoro Hawaii imports more than half of its crude oil from other countries. Its refinery processes 95,000 barrels of crude per day.