Since Harvey, gas prices at the pump are up 50 cents a gallon

Source: By By Steven Mufson, Washington Post • Posted: Thursday, September 7, 2017

A Shell station in Dallas on Aug. 31 after it ran out of gasoline. A run on gasoline caused long lines and drove up prices in the wake of Harvey. (David Woo/Dallas Morning News/AP)

On a normal day, Ken’s full service gasoline station in San Antonio pumps a couple hundred gallons each of gasoline, premium gasoline and diesel. But nothing has been normal since Hurricane Harvey hit the coast, and last week motorists stampeded to Ken’s to top off their tanks.

The gas station sold more than 1,500 gallons of unleaded regular and almost 2,000 gallons of premium in a single day, several times as much as usual, forcing Ken’s to start rationing, Lee Ruiz, the assistant manager, said. Then, Ruiz said in an interview “I shut down the pumps.” He completely ran out of premium last Friday and was expecting a new delivery on Tuesday.

“We were overwhelmed with customers faster than we could get next delivery,” Ruiz said.

 Harvey’s strike at the Gulf Coast has caused gas shortages and raised prices across Texas and the United States, industry experts said on Tuesday. Prices started to ease during the weekend, but Hurricane Irma, while still well off shore, started to send people in Florida scrambling to fill up their tanks and Gov. Rick Scott suspended highway tolls so people could more easily leave the area.

The oil refineries on the Texas Gulf Coast account for half of U.S. refining capacity and produce a quarter of the nation’s gasoline.

Nearly 10 percent of the nation’s refineries remained shut on Tuesday including Saudi Aramco’s 603,000 barrel-a-day Motiva plant and ExxonMobil’s 362,300 barrel-a-day Beaumont plant.

Other refineries remain at 50 percent capacity, including ExxonMobil’s Baytown refinery, with 560,500 barrels a day, the nation’s second biggest after Motiva.

The wholesale price of a gallon of regular unleaded gasoline in San Antonio jumped 49.85 cents during the past two weeks. Prices jumped 41.25 cents a gallon in Austin and 42.97 cents in Houston, according to Matthew Kohlman, senior managing editor of S&P Global Platts, an industry news group.

Once retailers added in a few pennies, costs shot up more than 50 cents a gallon at the pump to a Texas statewide average of $2.53, according to the Automobile Association of America. The national average price is up 30 cents a gallon.

Kohlman estimated two out of three gas stations in Houston were closed over the weekend. A number of Houston retail stations struggled to repair water damage while others’ pumps ran dry.

Some people have taken extreme measures. One motorist went out at 3 a.m. to fill his tank — and still found long lines. One retailer in the Dallas-Fort Worth area was getting gasoline supplies from as far away as Denver and Wichita. With pipelines that usually run to Dallas-Fort Worth out of service last week, some companies reversed the flow of refined products so that they would arrive from Oklahoma.

San Antonio public transit on Tuesday urged people to take the bus and was making the service free for the day.

But barring a setback from Hurricane Irma which is approaching U.S. shores, gasoline prices will probably start to taper off. Texas wholesale prices were already down two cents from Saturday.

The loading of trucks with gasoline and diesel resumed Saturday at Phillips 66’s Pasadena, Tex., refined products terminal, the first time since Aug. 28, when it was closed, the company said on its website.

Colonial Pipeline, the largest U.S. refined product pipeline which provides the Eastern states with about half of its gasoline, had suspended most deliveries, but it said on Monday it was restarting diesel and jet fuel shipments from Houston and was hoping to start pumping gasoline, S&P Global Platts reported.

Despite the prolonged shutdown, motorists in the Northeast have been able to obtain the gasoline and diesel they needed for the holiday weekend.  That’s because major oil companies have been able to draw down from ample commercial stocks of petroleum products.

In addition, European refiners have been stepping up shipments of gasoline to New York harbor. European motorists favor diesel-powered cars so refiners usually have excess gasoline supplies and U.S. refiners usually ship diesel to Europe. Tanker rates have doubled because of U.S. demand for gasoline, according to the Department of Homeland Security. But inland cities like Atlanta rely even more on the Colonial Pipeline.

“Right now anybody with a boat ready in Europe is trying to send it over,” Kohlman said.

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