Published: Sun, September 03, 2017
Money | By Armando Alvarado

Gulf Refinery Recovery Could Take Weeks; Fuel Prices Rise

Gulf Refinery Recovery Could Take Weeks; Fuel Prices Rise

Oil prices slid lower on Wednesday as ongoing disruptions from Tropical Storm Harvey kept refineries from buying crude, weighing on demand but prompting fears over fuel shortages. As many as 11 ports were shut as Harvey hit the Texas coast, leaving 28 tankers laden with more than 18 million barrels of overseas oil drifting offshore as of Wednesday night.

Wholesale gasoline prices, which does not include taxes and other costs applied at the pump, jumped 26 cents, or nearly 14 percent, Thursday to close at $2.14 a gallon, up 47 cents from before the hurricane struck land last week. Still, South Carolina has some of the cheapest gas prices in the country at $2.37 a gallon.

In the Augusta-Aiken area, the average price is $2.38 per gallon, compared to $2.11 a week ago.

Since last week, gas prices in Columbia have shot up 32 cents - even 14 cents in the past 24 hours, according to AAA - causing a run on gas in many areas of the Midlands. Energy Secretary Rick Perry warned that states attorney generals would be on the watch against price gouging. "My hope is that every AG across the country will go after those people and go after them in a very hard way and harsh way".

"Consumers will see a short-term spike in the coming weeks with gas prices likely topping $2.50 per gallon, but quickly dropping by mid to late September", said Jeanette Casselano, AAA spokesperson in a release.

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However there is confusion in the air if Arun Jaitley will continue as the Defence Minister for now. "But logistically that doesn't seem possible today being a Sunday", Jaitley told reporters.

Watch the video above to see the impact the storm had on Texas pipelines and refineries. Gulf coast refineries typically produce 5 million barrels of oil per day, almost one-third of the nations refining capacity. "AAA does not expect refineries to be offline for months, as early reports indicate minimal to no significant damage to Corpus Christi and Houston refineries". On Thursday, Colonial Pipeline shut down a crucial artery in the nation's fuel supply network that provides more than 3 million barrels of diesel, gasoline and jet fuel daily to major cities from Houston to NY.

Colonial said its Lines 1 and 2 are operating east of Lake Charles and it will be able to bypass any shuttered terminals near Port Arthur, Texas, when it resumes shipments Sunday from the Houston area.

Experts warn fuel could soon be in short supply in the Midwest and Northeast. That equates to about 2.5 million barrels daily.

The Energy Department said it will "continue to provide assistance as deemed necessary", including more potential drawdowns from the emergency reserve. "We knew that there were oil pumping platforms shutting down, refineries shutting down, evacuating people to safety". Some gulf refineries are already starting to come back on-line.

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