Harvey could push gas up 25 cents a gallon
Gas prices could rise 25 cents a gallon or more for several weeks in some parts of the country as the energy industry climbs out of Hurricane Harvey’s epic rainfall in southeastern Texas. The nation is heading into the busy Labor Day weekend, which marks the end of the summer driving season.
The flooding has completely or partly shut down 14 oil refineries, the U.S. Energy Department said, erasing more than 17 percent — about 3 million barrels a day — of U.S. gasoline production capacity.
“Gas prices will go up,” said Patrick DeHaan, a senior petroleum analyst with GasBuddy, which provides retail fuel pricing information. “The national average will rise 5 to 15 cents a gallon over the next two weeks. It’s up a penny already since yesterday. Areas of the Gulf of Mexico will see prices go up between 20 and 35 cents.”
The national average for a gallon of gasoline measured across 150,000 service stations is $2.38, DeHaan said. Gasoline prices jumped 40 cents in the wake of Hurricane Katrina, which struck New Orleans in 2005.
Things could get worse if the storm makes its way east along the Gulf Coast to New Orleans.
The coastal swath from Corpus Christi to New Orleans is one of the most industrialized petroleum regions in the world. Onethird of the U.S. refining capacity is based there.
“Oil prices are going down, and the kink in the hose is the refinery,” DeHaan said. “If you have no refinery, you got no gasoline, no jet fuel, no diesel fuel.”
DeHaan said eight of those refineries were shut down and another five or so were partially shut down. Refiners still open are running like mad to close the gasoline deficit and the higher prices that come with that demand.
A Texas City refinery sits amid floodwaters Saturday. Refiners still running reap the benefit of higher gas prices.