At $2.45, today’s national gas price average is the highest recorded price for a gallon of unleaded gasoline so far this year. The near-term combinations of numerous refinery and pipeline shut downs, tightened access to supply levels in the Gulf and anticipated high gasoline demand surrounding Labor Day weekend, means motorists may not have seen the full impact of Harvey at the pump.
“Over the next week, we could see another 10 to 15 cent increase at the pump. This will likely subside later in September following the holiday demand,” said Bevi Powell, Senior Vice President, AAA East Central. “The high inventory levels have the potential to offset gas price surges similar to what we have seen with past hurricanes.”
The coming days, with Corpus Christi refineries working to come back online and Houston/Galveston beginning to dry out, 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.
Gulf Coast Refinery and Pipeline Status
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. Additionally, DOE 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.
In addition to refinery shut downs, 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.
Refinery, pipeline and logistical problems on the Gulf Coast are expected to squeeze fuel supply delivery volumes to the Southeast, Midwest and Mid-Atlantic.
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.
Today’s gas prices in the East Central Territory:
- Pennsylvania – $2.62
- Ohio – $2.39
- New York – $2.53
- Kentucky – $2.42
- West Virginia – $2.47
The last time the national gas price average was $2.50 was two years ago in August of 2015.