Gas Prices Up as Hurricane Matthew Bears Down
CARS.COM — Expectations that gas prices would decline after Labor Day and perhaps fall below $2 before Christmas are taking a holiday. Motorists in the Southeast who just recovered from gasoline shortages and price spikes caused by a pipeline leak were bracing Thursday for potentially much greater damage to the supply and price — Hurricane Matthew.
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Matthew was bearing down on Florida and South Carolina, and was expected to hit land as early as Thursday night. Thousands of residents were evacuating coastal and nearby areas, and some gas stations were running out of fuel as motorists rushed to fill their tanks. GasBuddy.com this week activated a gas-availability tracker that showed stations in Jacksonville and Orlando, Fla., and Myrtle Beach, S.C., were without fuel.
“Outages have been popping up in Matthew’s expected path as motorists evacuate and clog stations,” GasBuddy.com analyst Patrick DeHaan said in a statement to Cars.com. “In addition, last month’s Colonial Pipeline outage made the situation worse in Georgia, South Carolina and North Carolina, so supply was already very tight in those markets. Motorists are simply overwhelming what supply is available.”
Forecasters predicted that heavy rains and high winds from Hurricane Matthew could cause damage in nearby states such as Georgia and North Carolina. DeHaan said the storm might not create major gasoline shortages.
“I’m not expecting issues with refiners or shipping of gasoline, but stations may lose power. In the wake of the storm, we typically see what we call ‘demand destruction’ as motorists stay home, repair their homes, etc. So while demand usually is highest before the storm, demand destruction after the storm will likely balance it out,” he said.
Further up the East Coast, New Jersey residents also were bracing for a price jolt at the pump. Gov. Chris Christie and leaders of the state legislature last week agreed to a 23-cent increase in the state’s gasoline tax to pay for improvements to roads, bridges and rail systems. The legislature on Wednesday postponed a vote on the agreement until Friday.
New Jersey usually has some of the cheapest pump prices in the country because its current gas tax of 14.5 cents per gallon is the second lowest after Alaska, where it is 8 cents. The New Jersey gas tax was last raised in 1988.
Meanwhile, oil prices have rallied after the Organization of the Petroleum Exporting Countries agreed last week to reduce oil production. U.S. oil was trading at more than $50 a barrel early Thursday for the first time since June. The result is that gas prices rose again the past week, by 4 cents a gallon to a national average of $2.25 for regular, according to GasBuddy.com and the AAA Daily Fuel Gauge Report. That is the third consecutive week of increases, and the national average for regular is now 5 cents higher than a month ago, when most analysts were predicting pump prices would decline.
Regular gas is now just 4 cents lower than it was a year ago, when gas was on a slide that lasted into early 2016. Premium gas and diesel fuel each rose 3 cents the past week to $2.74 and $2.38 a gallon, respectively. Premium is 4 cents cheaper than a year ago and diesel is 12 cents cheaper.
Gasoline prices typically fall after Labor Day because of lower demand and a switch to winter blends in most parts of the country that are cheaper to produce. Diesel fuel prices usually go up during the winter because some of the heavier oil used to make diesel is diverted to home heating oil. Prices rose in most states the past week, and as of Thursday morning no states averaged less than $2 a gallon for regular for the first time since late June, according to AAA’s data.
New Jersey and Texas had the lowest statewide averages at $2.01, though that could change soon in New Jersey if the gas tax increase is approved. Regular averaged $2.04 in Arkansas and $2.05 in Mississippi. The prices in all four states are 3 cents higher than they were on Monday. The most expensive states for regular gas were Washington, $2.72; California, $2.79; and Hawaii, $2.82.
