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The effects of Hurricane Harvey’s destruction are not just contained in the south.
Coloradans are experiencing higher prices at the gas pump due to the impacted refineries in the Gulf Coast.
9NEWS verified how high prices are forecasted to rise… and for how long.
WHAT WE FOUND
The end of summer usually means gas prices go down.
In fact, GasBuddy petroleum analyst Allison Mac said her team thought the weekend was going to be the second cheapest Labor Day in the past 12 years.
“Because of the hurricane, we’re obviously seeing a very opposite effect, and prices are going up,” Mac said. “I believe we are at the highest point in regards to national gas prices that we’ve seen all year. And a big part of it is because of where this hurricane is hitting. It’s hitting at basically the epicenter of U.S. refineries.”
She said nearly one quarter of the entire U.S. refinery capacity was shut down because of the natural disaster.
A U.S. Department of Energy report released Wednesday described the state of petroleum refineries in the Gulf Coast region:
- Five were shut down, which is equal to 5.7 percent of total U.S. refining capacity.
- Six are in the process of restarting after being shut down. They might take several days or weeks to start producing product, and equal 11.6 percent of total U.S. refining capacity.
- At least seven were operating at reduced rates, and equal 9 percent of total U.S. refining capacity.
As of Wednesday afternoon, the GasBuddy website reported the average retail fuel prices in the U.S. were up across the board:
- 47 cents from last year
- 33 cents from last month
- 22 cents from last week
According to the website Wednesday, Sept. 6, the average retail fuel prices were up from last month by 18 cents in Colorado, in comparison to 38 cents in Texas, 39 cents in Kentucky, 38 cents in Illinois and 43 cents in South Carolina.
Gus Faucher, chief economist for the PNC Financial Services Group said the spike in gasoline prices will only last a few weeks.
“I would expect by the time it’s all said and done we’re going to see prices up about 25 or 30 cents a gallon nationally,” Faucher said.
Spokesman for AAA Colorado Skyler McKinley said throughout Colorado there will be slight, but noticeable increases in the price of gasoline.
“We’re not going to see it to the same extent a lot of other places around the country are,” McKinley said. “That’s because our direct supply is not being affected. It’s the ripple effect of fuel that would have come here, going elsewhere.”
Mac said Colorado gets a lot of its refined gas locally, as well as from Wyoming and The Dakotas.
“The reason why it is being impacted still is because these other refineries are producing gasoline, but it’s now being shipped to these other regions that need it,” Mac said.
Thus, people are seeing prices go up in Colorado.
“It might cause a short-term supply shock, but what it’s not going to cause is America pivoting and plummeting into a gas shortage,” McKinley said.
Mac said once the refineries are back up and running, the prices will begin to go back down, which she expects to happen by mid-September.
Looking ahead to mid-September, McKinley said the price of gas will begin to fall below where it was before the natural disaster. Peak driving season will be over and stations will switch back over to winter blend gasoline, which he said typically results in a 10 percent price decrease alone.