Gas prices spike after hurricane

Ann Santiago
September 1, 2017

The national average for gasoline prices Thursday was $2.45 per gallon.

Hurricane Harvey has potentially cut USA fuel-making capacity to the lowest level since 2008 after its initial strike on the Texas coast late last week.

Gov. Roy Cooper said gas shortages and higher gas prices should be expected. Separately, the Explorer Pipeline said on Wednesday it had shut its main fuel line as supplies dwindle. AAA said the national average could rise to $2.50 per gallon if refineries are down "for an extended period of time", which would be the highest since August 28, 2015. The price spike is more dramatic in some states such as Georgia, where the average cost per gallon of regular gas has climbed from $2.22 a week ago to $2.39 now.

Colonial shut down its main diesel and jet fuel line on Wednesday and the gasoline line on Thursday because of outages at its supply points and a lack of supply coming in from refineries.

Almost one-third of the nation's refining capacity is along the Gulf Coast from Corpus Christi, Texas, to Lake Charles, and about one-quarter of the Gulf Coast's oil refining capacity was taken offline, according to the Oil Price Information Service. It supplies 75 percent of metro Atlanta's gasoline. And while only half the Dallas-Forth Worth area stores will have gasoline, all will remain open, he said.

Oklahoma-based QuickTrip enacted a similar plan previous year in metro Atlanta, where it has about 133 stores, when the Colonial Pipeline closed due to a leak in Alabama.

"Colonial is one part of the fuel delivery system, and there are multiple means of supplying the market to mitigate concerns with supply, including other pipelines, trucks, and barges", it said. That event led to days of increased gas prices and empty pumps across the southeast. "This is going to be the worst thing the USA has seen in decades from an energy standpoint".

Thirteen oil refineries have been shut down or are in the process of closing, while several others are operating at reduced rates.

Colonial's system from Lake Charles north was not affected by the storm and volumes are continuing to ship.

Half of the 26 refineries that connect to Colonial's pipeline system are between storm-ravaged Houston and Lake Charles, which is just east of the Beaumont-Port Arthur metro area. Josh Carrasco, a spokesman for AAA AutoClub Group, told NBC affiliate WXIA of Atlanta that Labor Day gasoline prices would likely be the highest since 2014.

"You can't over-consume at the pump; you can't panic at the pump, because you could really make things bad for us here in the Carolinas, and they don't have to be" Wright said, "Yes, prices are going up; yes, we have to get through it, but albeit, hopefully it's a very short period and we'll get back to normal". "And then we'll have more clarity down the road".

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