Shortages ‘just temporary,’ local distributor says

Published 12:00 am Saturday, September 20, 2008

Houston-area residents Eddie and Mary Lewis stopped at four Vicksburg gas stations Friday afternoon before finding one on Cherry and Clay Streets that was not out of gas. The couple expressed little frustration with the apparent shortage, however, as Vicksburg prices were much lower than they had seen on their way back to their Sugar Land, Texas, home from an evacuation vacation to the Smoky Mountains in Tennessee.

“We paid $4.69 a gallon in Tennessee, and $4.09 in Montgomery (Ala.) yesterday,” said Eddie Lewis while he pumped gas in Vicksburg at $3.80 a gallon. “This is the cheapest place we’ve found yet on our way back.”

Gas stations here continued to have spotty supplies Friday as Texas refineries began resuming production nearly a week after Hurricane Ike dealt a glancing blow to the country’s largest oil and gas infrastructure. Most stations reported they have been out of higher grade regular fuel for days, and some were out of all gas besides diesel. 

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“There’s still some shortages lingering because of allocations at the terminals, but product is on the way,” said Dan Waring, president of Waring Oil Company, which supplies gas to some Texaco and Chevron stations in Vicksburg. “Most of the terminals are going back to 100-percent allocations soon.”

While the demand for gas has, in some cases, increased due to rumors about limited supply and rising prices as well as people evacuating from hurricanes, the refineries are not yet up to full production and the distributors are being hampered by long lines at the terminals, said Waring.

“They can’t get enough trucks filled up fast enough to get it delivered to everyone,” he said. “So, you’re going to see spotty shortages.”

Regardless, Waring said there is no need for motorists to panic or purchase more gas than they normally would, as happened in Vicksburg in the days leading up to Ike’s Sept. 13 landfall, which created long lines at many stations and led some to ask customers to limit purchases to 10 gallons.  

“It’s just temporary,” Waring said, adding Vicksburg motorists are seeing fewer shortages and lower prices than others across the country.

Although most truckers who haul gas are sitting in lines for hours at terminals across the state, Waring said, Vicksburg distributors have benefitted from the uninterrupted production of gas at a Chevron/Texaco refinery in Pascagoula. Additionally, a fuel terminal and pipeline pump station in Collins were not affected by either Hurricane Gustav or Ike, said Emily Thompson, spokesman for Kinder Morgan, the company which operates the two facilities.

“We’re not seeing any supply issues here,” Thompson said.  

Gas prices in Vicksburg Friday averaged from $3.75 to $3.80 per gallon of regular unleaded, down about 4 cents from Thursday but still about 15 cents higher from a week ago. Nationwide, the average price of unleaded regular dropped 2.8 cents to $3.80 a gallon Friday, according to a survey released by motorist group AAA. Six states reported gas prices above $4 a gallon in the AAA survey, including Alaska, Georgia, Hawaii, Illinois, Indiana and Michigan.

John Moak, owner of Vicksburg-based Petroleum Realty, said gas supplies at the 10 unbranded stations he distributes to were spotty from station to station Friday.

“I’ve got some with regular unleaded and some that are completely out. Premium gas has been a problem in Vicksburg for a while now,” he said.

Moak had only diesel available for delivery to his customers Friday due to allocation restrictions, but expected to have regular unleaded gas again today.

“The supply is coming back, and the rate that it’s coming back should increase,” he said. “Everybody is getting some product everyday. This is temporary.”

Waring said premium gas has been in shorter supply because it takes longer and is more expensive to refine, and many refineries focused on producing as much gas as possible through Hurricanes Gustav and Ike.

As many as 33 oil refineries, which convert crude oil into usable gasoline, had been shut down or operating with reduced capacity in the Gulf Coast in the wake of the recent hurricanes. That number was reduced to around 18 Friday.

Meanwhile, crude oil prices rose $6.67 during trading Friday to settle at $104.55 a barrel. It was the second-largest rise of oil prices in dollar terms on record, bested only by a $10.75 rise on June 6.