Gas prices spike as Isaac impacts Gulf refineries
Tropical Storm Isaac shut down nearly a dozen refineries in the Gulf of Mexico earlier in the week, choking gasoline supplies and leading to a sharp spike in local gas prices.
By Jamison Cocklin
Gas prices jumped sharply across Ohio and other parts of the country overnight Tuesday as Hurricane Isaac made landfall in southeastern Louisiana.
The hurricane shut down nearly a dozen refineries along the Gulf Coast and choked supplies in the process.
On Monday, the average price for a gallon of regular-grade gasoline was $3.76, according to an Ohio survey from auto club AAA, the oil price information service and Wright Express. By Wednesday, prices were averaging $3.89 per gallon across the state, with prices reaching as high as $3.95 and holding in some areas, about a 20-cent hike in less than a day.
“I can tell you there’s problems in the Great Lakes region,” said Gregg Laskoski, a national senior petroleum analyst at GasBuddy.com. “Everyone’s accessing fuel from different suppliers. Infrastructure issues diminish supplies, and when consumer demand remains the same, it creates immediate problems with pricing.”
Isaac prompted a series of federal guidelines that require oil rigs to evacuate personnel. Laskoski said he doesn’t anticipate the price increase to last long.
“These refineries will get back to work quickly — within a week’s time,” he said. “But it’s not like a mom-and-pop store where you simply turn the lights back on. It’s an extensive process that takes time, and worst-case scenario could be two weeks.”
Coupled with the hurricane, other issues including a ruptured pipeline in Wisconsin and a fire earlier this month at a refinery in Venezuela have helped drive wholesale gasoline prices up from $2.90 to $3.30.
Though price gouging is considered illegal, Laskoski said laws in most states do little to curtail soaring gas prices.
“Unfortunately, under these circumstances, this is the norm,” he added. “Price-gouging laws are worthless in most states, and they really don’t exist until a state of emergency is declared.”
Nationally, gasoline prices were averaging $3.80 Wednesday, according to AAA, up 5 cents from Tuesday.
Before the storm, prices already were up in Ohio by 27 cents from where they stood last month. As the hurricane weakens and moves inland, it is expected to bring rain and wind toward the state during Labor Day weekend, and if prices at the pump stay high, the combination could hamper holiday plans for some travelers.
“The weather isn’t going to do us any good,” said Cleveland-based economist George Zeller. “And higher gas prices in the long run could mean more inflation, and with lower wages that could put downward pressure on spending this weekend. We’ll have to wait and see what happens.”
At Conroy’s Express on Market Street in Youngstown, a gallon of regular-grade gasoline went from $3.79 Tuesday to $3.89 Wednesday. Late Tuesday night, further up the road in Boardman, at the Shell station on Market Street and Shields Road, regular grade had jumped to $3.95 while premium grade was $4.07.
“We haven’t seen anything drastic,” said Conroy’s Express manager Matt Westhead as he discussed his customers’ reactions to the soaring prices. “People have been playfully joking around; they really can’t do anything about it.”