Gas Price Gouging Hits Hurricane States

But even the oil that is already out of the ground is no longer being turned into gasoline. So far, 13 refineries in Texas have shut down or slowed down operations from Port Arthur to Houston to Corpus Christi.

These refineries can handle 3.6 million barrels a day of crude oil, which represents 75 percent of the total refining capacity in Texas. The state leads the nation in refining, representing more than one-fourth of the country's total refining capacity.

There are also going to be major delays in moving oil from one location to another. Major crude oil pipelines have been shut down throughout Texas and Louisiana. These pipelines deliver oil and gasoline to the Gulf Coast region as well as up and down the Eastern seaboard.

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That means less oil, and gasoline will be available to gas stations, which in turn means reduced supplies. That can lead to higher prices, especially if drivers, worried about possible shortages, start filling up.

The explanation for the increases at the pump can be blamed on higher wholesale gasoline prices in the areas directly affected by Hurricane Ike. On Thursday, wholesale gasoline rose nearly $1.50 -- more than 40 percent -- in one day, the biggest one-day spike since the Arab oil embargo in 1973, said John Kilduff of MF Global. If those wholesale prices were to hold, Kilduff said the price at the pump could rise to $5.25.

Oil settled at $101.18, up 31 cents, at the end of trading today. Earlier in the day during trading, oil sold for $99.99. The last time oil traded below $100 was May 2, and the time oil settled below the nice, round figure of $100 was March 4.

"It does seem counter-intuitive to consumers, but you really can't consume crude oil," said Mary Novak, energy analyst at Global Insight. The only thing you can consume is gasoline.

Gasoline inventories in the U.S. are at an eight-year low, and a major disruption to the nation's gasoline supply could send prices soaring immediately, even if oil prices continue to drop.

"Oil prices and gas prices used to be much more in lock step and they separated [in the] last couple of years," said Jeff Leonard of the National Association of Convenience Stores. "They reflect each other, think biggest schism seen."

Ben Brockwell, director of data, pricing and information services for the Oil Price Information Service, told The Associated Press, "The path of the storm has put the entire supply chain under stress from the refinery level all the way to the retail station level. Hopefully, it's a temporary phenomenon, but we won't know until next week."