Shell Mainstream Partners is going public, while two U.S. senators propose a federal gas tax increase.
Two Senators Propose a Federal Gas Tax Hike
Republican Sen. Bob Corker and Democratic Sen. Chris Murphy Wednesday announced they want to see an increase in the federal gasoline and diesel tax to create a fund that would prevent the country from running out of money for transportation projects. The call is for an increase of six cents a year for two years, and link the increase to inflation for possible future increases. The federal gasoline tax right now is 18.4 cents a gallon and the diesel tax is 24.4 cents a gallon. The federal gas tax has not been increased in 20 years. "I know raising the gas tax isn't an easy choice, but we're not elected to make easy decisions. We're elected to make the hard ones," said Murphy in a statement.
More Problems with Today’s Vehicles
J.D. Power issued its U.S. Initial Quality Study this week and reported that buyers of new cars and trucks see more problems with their vehicles. This is the second year in a row there has been an increase in complaints in the J.D. Power report. Overall, there was an average of 116 problems per 100 vehicles purchased. Some of the more frequent complaints centered around the latest high-tech electronics that do not work properly. Also, some vehicles suffered engine and climate control issues related to the harsh winter. “The main issue for many buyers continues to be with tech features not always working as expected," said Renee Stephens, vice president of U.S. automotive quality at J.D. Power. "Voice recognition, Bluetooth pairing and other features are areas where new vehicle owners see problems."
Shell Mainstream Partners is Going Public
Shell Mainstream Partners filed for an initial public offering Wednesday in an attempt to raise up to $750 million, according to a filing with the Securities and Exchange Commission. Shell Mainstream is a master limited partnership formed by Royal Dutch Shell. The company said it will initially own interests in four onshore and offshore pipelines in Texas and Louisiana, and proceeds from the IPO will be used to acquire additional pipeline companies. The IPO is being underwritten by Barclays and Citigroup. According to the IPO filing, Shell Mainstream had pro-forma earnings of $23.8 million and revenue of $36.1 million during the quarter that ended March 31.
Argentina Could Default On Its U.S. Loan
The Argentinian government announced Wednesday it would be impossible for it to pay its bond service due on June 30. Officials from Argentina said the recent U.S. court decision to increase pressure on the country for payment is causing difficulty in making the payment. Argentina is in a legal fight with creditors that has lasted 12 years, as the creditors have refused to participate in two debt restructurings following Argentina’s default in 2002 on $100 billion in bonds. Officials in Buenos Aires say the battle in U.S. courts has kept the country from getting international capital markets involved in its economy. On Monday, the U.S. Supreme Court refused to hear an appeal by Argentina for another restructuring of its debt.
U.S. Unemployment Claims Fall
The Labor Department Thursday said the number of Americans filing new claims for unemployment benefits dropped more than expected, suggesting it marks a further strengthening of labor market conditions. Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000 for the week that ended June 14. The previous week’s claims were revised to show 1,000 more applications than previously reported. For last week, economists had expected jobless claims to fall to 314,000. The Federal Reserve Wednesday said it expects the job market to continue to improve gradually and suggested there could be a slightly faster pace of interest rate increases starting in 2015.