Gas prices expected to spike in short term

Thanks to Harvey, U.S. motorists could pay 20 cents more

Gasoline shortages rippled through the Houston area and prices are rising for the entire country as Hurricane Harvey wreaks havoc on the energy industry.

U.S. motorists are likely to experience average increases of 10 cents to 20 cents per gallon, GasBuddy.com petroleum analyst Patrick DeHaan said Tuesday. That’s up from a previous forecast of 5 cents to 15 cents per gallon.

Outages at Texas Gulf Coast refineries and disruptions to shipping corridors are fueling the price increases, although historically high gasoline inventories are likely to somewhat mitigate the impact.

At least two dozen Houstonarea fuel stations reported to GasBuddy’s tracker that they did not have gasoline, DeHaan said. Some are likely underwater or have sustained damage from the ferocious flooding that continues to crush the region.

Five refineries in the Houston area and six in the Corpus Christi area were closed as of Tuesday morning, representing more than 12% of the nation’s refining capacity, according to the Department of Energy and the American Petroleum Institute. Another seven refineries in the region were operating at reduced capacity, according to the DOE. Outages included Exxon’s massive refinery in Baytown.

Several ports through which energy is often shipped, including Houston, Texas City, Galveston and Freeport, were still closed as of Tuesday.

Other infrastructure has been disrupted, including the critical Colonial Pipeline, which carries gasoline to several states in the Southeast. Colonial Pipeline said its service was “interrupted” at its origin in Houston.

“Right now logistics are frozen,” DeHaan said.

Nationally, gas price increases are likely to last at least two weeks and possibly more than a month, DeHaan said.

Part of the uncertainty stems from a lack of information about the long-term damage to refinery infrastructure.