Shut-down refineries to blame for rising gas prices|[10/02/05]
Published 12:00 am Tuesday, October 4, 2005
Recent jumps in fuel prices at area stations are following national trends for unleaded fuel – a short-term effect of Gulf Coast refineries still out of commission after Hurricane Rita, sources say.
Eight of the 16 refineries in the path of Hurricane Rita remain shut down because of either damage to facilities or to electrical grids that supply power to them, according to U.S. Department of Energy reports updated Monday.
Three more in Louisiana and the Chevron USA refinery at Pascagoula remain shut down because of Hurricane Katrina. All totaled, those 12 refineries represent 3,031,700 barrels of oil per day that are not being processed.
Locally, the price of a gallon of regular unleaded gasoline shot up as much as 25 cents last week, depending on the station, to about $2.79.
Statewide, the average price of regular unleaded stood at $2.90 today, down from a yearly high of $2.91 Monday, according to the American Automobile Association. Diesel prices also stood at a yearly high of $3.18, according to AAA.
Nationally, the average price for unleaded stood at $2.94 and diesel was holding at a yearly high of $3.15.
“The gasoline supply is improving and barring any negative new developments, prices should begin to drift downward,” said Michael Right, spokesman for AAA Missouri, the parent AAA club for Mississippi, Louisiana, Arkansas, Missouri and portions of Illinois and Kansas.
Still, prices at stations supplied by Waring Oil Company saw increases in the past week, in spite of efforts by big oil companies to hold prices down in larger markets.
“There were two increases in one day last week. Even the independent stations saw three or four jumps some days,” said Dan Waring, an owner of Waring Oil Company.
Waring assured that allocations at his terminals are running at around 100 percent, with the exception of one coming from Lake Charles, La., which was at 75 percent.
Waring Oil provides fuel for 47 stations, including many in the Vicksburg area. Independent fuel companies supply other stations and convenience stores, where these outlets’ prices are dependent on costs, a setup referred to as the “spot market” in the industry.
“The spot market keeps going up for them. The cost keeps getting passed onto the street,” Waring said.
Independent dealers are experiencing a larger shortage than normal, as they are not receiving overages in fuel from bigger companies, said Jerry Wilkerson, president and executive director of the Mississippi Petroleum Marketers & Convenience Stores Association.
Wilkerson sees at least another week of prices of $2.79 or more for a gallon of regular unleaded until affected refineries can start replenishing supply again.
“It usually takes several days for them to be closed like this and be brought back, even without any damage,” Wilkerson said.