Harvey-Induced Refinery and Pipeline Shut Downs Spur Short-Term Gas Price Spike
By Space Coast Daily // September 1, 2017
GAS HITS HIGHEST PRICE OF THE YEAR
BREVARD COUNTY, FLORIDA — The national average for a gallon of unleaded gasoline hit $2.45 today, surpassing the 2017 high set on April 20, according to data provided by AAA, from a collection of 120,000 gas stations nationwide, based on credit card swipes and direct feeds in cooperation with the Oil Price Information Service and Wright Express for unmatched statistical reliability.
The Florida average is $2.41, just 6 cents lower than the 2017 peak price of $2.47, set on April 20th.
Motorists should expect gas prices to rise another 5-10 cents in the near-term due to a combination refinery and pipeline shut downs, tightened access to supply levels in the Gulf, and anticipated high gasoline demand surrounding Labor Day weekend.
“Consumers should expect to see the highest Labor Day prices at the pump since 2014,” said Josh Carrasco, spokesperson, AAA – The Auto Club Group.
“We expect the national average to top $2.50/gallon. On the positive side, AAA does not expect Gulf refineries to be offline for months, as early reports indicate minimal to no significant damage to Corpus Christi and Houston refineries. Once refineries are back to full operation, we should expect to see gas prices fall towards the end of September.”
Corpus Christi refineries are working to come back online and Houston/Galveston are beginning to dry out. The next few days will offer more insight into how long total recovery and restoration efforts may take.
Harvey has set a record for the greatest amount of single-storm rainfall for the continental U.S. Through Friday, the storm continues to threaten heavy rain to parts of Louisiana and eastern Texas (3 to 6 inches), and even move into western Kentucky (10 inches). In the Houston/Galveston area, flooding, not rain, is now the concern.
“The storm has had a devastating effect on the lives of so many,” said Kevin Bakewell, Vice President of Corporate Public Affairs, AAA – The Auto Club Group.
“Our thoughts are with all of those impacted by this storm. Like many organizations we are providing corporate financial support to assist those in the region and encouraging our employees to do the same.”
Gulf Coast Refinery Updates
• As of Wednesday evening, the Department of Energy (DOE) is reporting that 10 Gulf Coast refineries remain shut down
• Six refineries have begun the process of assessing damage and restarting, which may take several days. Two refineries in the Gulf Coast region are operating at reduced rates.
• Refineries in Lake Charles, La., could shut or reduce rates as Harvey moves east
• The DOE has released 500,000 barrels of oil from the U.S. Strategic Petroleum Reserve – the nation’s reserve of crude oil. The oil will be delivered via pipeline to the Phillips 66 refinery in Westlake, LA. According to DOE, it will continue to review incoming requests for oil in the reserve, meaning that it could release more if deemed necessary
• Several major pipelines continue to operate at reduced rates, have shut down or plan to shut down due to lack of supply
• The Colonial Pipeline announced Wednesday evening it expects to temporarily suspend its gasoline, diesel and jet fuel pipelines. With its supplying refineries closed in the area, the pipeline operator cited reduced output as the reason for suspending its transportation operations. The Pipeline originates in Houston and supplies the East Coast.
“The shut downs do not indicate a shortage of gasoline supplies in the Gulf Coast region or across the country,” said Carrasco. “Overall stocks in the Gulf are above average levels and will be available to drivers once power is restored and area roads are cleared.”
Refinery, pipeline and logistical problems on the Gulf Coast are expected to squeeze fuel supply delivery volumes to the Southeast, Midwest and Mid-Atlantic.
“Northeast refiners are stepping in and barging supplies to the U.S. Southeast, the Caribbean, Mexico and South America to offset the lack of supply from Gulf Coast refineries and pipelines shut down due to Harvey,” added Carrasco.
To help alleviate concerns about fuel supply shortages as a result of the refinery and logistics issues in the Gulf Coast, on Wednesday the Environmental Protection Agency (EPA) issued a waiver requirement for low volatility conventional gasoline and Reformulated Gasoline (RFG) in 12 states: Alabama, Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Texas, Louisiana and the District of Columbia. With the waiver, retailers in the aforementioned states are allowed to sell “winter blend” gasoline early.
Florida Gas Prices
Since Friday, when Harvey came ashore in Texas, gas prices have increased 10 cents in Florida. Currently the average price for a gallon of regular unleaded gasoline in Florida stands at $2.41. Today’s average is just 6 cents lower than the 2017 peak price of $2.47, set on April 20th.
The metro areas with the lowest gas prices in the state are:
• Jacksonville – $2.36
• Tampa – $2.38
• Daytona Beach – $2.38
The most expensive markets for gas prices in the state are:
• West Palm Beach – $2.50
• Miami – $2.45
• Fort Lauderdale – $2.44
• Find Local Gas Prices
Daily national, state, and metro gas price averages can be found at Gasprices.aaa.com
Motorists can find the lowest gas prices on their smartphone or tablet with the free AAA Mobile app. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance.
Learn more at AAA.com/mobile. AAA clubs can be visited on the Internet at AAA.com
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