Ike pushes gasoline prices back toward $4

From Florida to Tennessee, and all the way up to Connecticut, people far from Hurricane Ike's destruction felt one of its tell-tale aftershocks: gasoline prices that surged overnight — to nearly $5 a gallon in some places.

Fears of supply shortages, and actual fuel-production disruptions, resulting from Ike's lashing of vital energy infrastructure led to pump price disparities of as much as $1 a gallon in some states, and even on some blocks.

Late Saturday the U.S. Minerals Management Service said there were two confirmed reports of drilling rigs adrift in the central Gulf of Mexico.

Compounding the jitters and higher costs for gasoline retailers was the fact that some big refineries along the Gulf Coast had been shut for nearly two weeks following Hurricane Gustav. Power outages caused by Ike threatened to keep millions of gallons of gasoline output idled for at least several days.

Emergency officials on Sunday said Texas refineries appeared to have escaped major flooding — a sign production could rebound quickly once power is restored — but that could take days and oil companies warned the effects of Ike could still lead to a temporary crunch.

"Chevron is concerned about severe gasoline supply disruptions in the wake of Hurricane Ike. It may not be possible for us — and other manufacturers — to maintain normal supplies in the coming days," the company said in a news release.

Some 15 Texas oil refineries, including the giant ExxonMobil refinery in Baytown, were shut as a precaution ahead of the storm, while another in Louisiana remained shut in the wake of Hurricane Gustav two weeks ago.

Together, the refineries make up just under a quarter of U.S. fuel production capacity.

Ike also shut down crude oil production in the Gulf of Mexico, a quarter of U.S. output, along with the bulk of shipping, port and pipeline operations on shore, hindering the transport of fuel to other parts of the country.

The U.S. Environmental Protection Agency has relaxed clean air fuel regulations in 11 states to ease any supply disruptions resulting from the storm.

Meanwhile, the price of regular gasoline soared as high as $4.99 a gallon in Knoxville, Tenn. on Saturday, up from $3.66 a day earlier.

In Florida, the attorney general's office reported prices as high as $5.50 a gallon in Tallahassee and said it had received 186 gouging complaints.

Gov. Charles Crist said on Friday that $5 a gallon "can only be described as unconscionable" and added: "Raising rates to exorbitant levels like this only causes unnecessary panic and fear. This type of behavior will not be tolerated."

In Connecticut, AAA said average prices jumped 10 cents overnight and Attorney General Richard Blumenthal said his office had received complaints of stations charging more than they advertised, raising prices more than twice in a single day and other problems.

"A lot of it is simply incredible," Blumenthal said, "and a lot of the price increases make no sense economically in terms of supply and demand."

Prices in California on Saturday ranged from $3.49 to $4.39 per gallon. In the eastern suburbs of Cleveland, gasoline jumped from $3.55 early in the week to $3.79. Regular gasoline at Chicago-area stations averaged $4.12 a gallon.

The price jumps came after the wholesale price of gasoline soared to $4.85 a gallon Friday in anticipation of Ike's arrival.

Page
  • 1
  • |
  • 2
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...
See It, Share It
A Gilchrist county sheriffs car sits at the end of a trailer home where 7 members of a family were slain by their grandfather in Bell, FL, Thursday, Sept., 18, 2014. The grandfather, Don Spirit, pictured, also killed himself.
Phil Sandlin/AP Photo | Gilchrist County Sheriffs Office
PHOTO:
St. Andre Bessette Catholic Church in Ecorse Michigan
PHOTO: Phoenix police officers escort Arizona Cardinals running back Jonathan Dwyer, to the 4th Avenue Jail following his arrest, Sept. 17, 2014 in Phoenix.
The Arizona Republic, David Kadlubowski/AP Photo