Virginia among states with biggest gas prices increases post-Harvey

Hurricane Harvey unleashed unprecedented amounts of rain in and around the Texas Gulf Coast, affecting homes, businesses and oil refineries.

virginiaAbout one quarter of the refining capacity in the region has been knocked offline, leading to more expensive gas prices across the country.

States close to, or in the lower Atlantic seaboard, like Texas, Louisiana, Arkansas, Tennessee, Virginia and Georgia are among those which are likely to see the largest gas prices increases as the Gulf Coast is the primary provider of gasoline for the region.

The impact could be felt as far north as Delaware.

“While the full impact of Hurricane Harvey on gulf coast refineries is still unknown, the outages that have already occurred, will prompt gas price increases of approximately 15-25 cents for many states east of the Mississippi,” said Martha Mitchell Meade, Manager Public and Government Affairs for AAA Mid-Atlantic. “Increases could, however, go higher than 25 cents per gallon if refinery damage is extensive.” The gas prices spike is expected to hit within about ten days.

Gas prices increases are not expected to be as severe as they could be or as they were after hurricane Katrina when prices increased 80 cents per gallon.

  • Current supply of 100 million barrels of crude is strong and is in addition to a large strategic reserve that the president could release if indicated.  As a result, if refineries restart and crude oil and employees can get to them, they is enough product to refine.
  • The high-demand summer driving season officially ends on Monday, Labor Day, further easing production pressure.
  • The Environmental Protection Agency may waive current restrictions and allow gulf coast refineries to produce winter blends of gasoline immediately. These blends are less expensive to produce and could therefore help to curtail extreme price increases at the pump.
  • While not yet known, early indicators do not seem to point to extensive damage to majority of refineries in the gulf.

AAA is remaining as optimistic as possible based on current information coming out of the gulf, yet there are still many “unknowns” regarding how the gas situation will play out in the days, weeks and possibly even months to come. “Despite the country’s overall oil and gasoline inventories standing at or above 5-year highs, until there is clear picture of damage and an idea of when all refineries can return to full operational status, gas prices will continue to increase,” added Meade.

AAA noted the following as some of the information which is still in flux.

  • Many refineries are still down or only partially operational.
  • Damage to refineries is unknown.
  • Inability for workers to get to refineries is a concern.
  • Transportation systems which carry gasoline or crude could be impacted.
  • Time line for all refineries to be fully operational is unknown.

At $2.40, today’s national gas price average is six cents more expensive on the week and one of the largest one-week national gas prices surge seen this summer.

The national average could climb to $2.50 as a result of Harvey. The last time the average reached $2.50 was Aug. 28, 2015. Some Texas refineries could be back online as early as the end of this week, while refineries near the Texas/Louisiana coast are operating at reduced rates.




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