Isaac brings higher gas prices, south and north

David Albers/Staff
- Gas prices push into the 4-dollar range.

Photo by DAVID ALBERS, Naples Daily News // Buy this photo

David Albers/Staff - Gas prices push into the 4-dollar range.

Storm Shield

Storm Shield

We have you covered with our Storm Shield app--top-rated in iTunes.

News Alerts

News Alerts

Sign up to get the latest new updates sent straight to your phone.

Hurricane Guide

Hurricane Guide

Find hurricane shelters, plot evacuation routes and track a hurricane in the special section online or pick up a print copy at your local Ace Hardware.

Participate

Submit your photos and videos of Issac to our Participate site.

NEW YORK — Drivers are being hit with the biggest one-day jump in gasoline prices in 18 months just as the last heavy driving weekend of the summer approaches.

As Hurricane Isaac swamps the nation's oil and gas hub along the Gulf Coast, it's delivering sharply higher pump prices to storm-battered residents of Louisiana and Mississippi — and also to unsuspecting drivers up north in Illinois, Indiana and Ohio.

The national average price of a gallon of gas jumped almost five cents Wednesday to $3.80, the highest ever for this date. Prices are expected to continue to climb through Labor Day weekend, the end of the summer driving season.

"The national average will keep ticking higher, and it's going to be noticeable," says Patrick DeHaan, senior petroleum analyst at Gasbuddy.com.

Southwest Floridians have seen an uptick in prices as well.

"It's risen a lot," said Rossana De Gaspari, who was filling up Wednesday at a Shell station on Airport-Pulling Road. "We make less trips to the grocery. Shopping is affected and of course, visiting relatives."

In Florida, the average price for a gallon of gas rose 10 cents to $3.775 over the last week, according to AAA's daily fuel gauge report. Drivers in the Fort Myers-Cape Coral metro paid on average $3.779 Wednesday, compared to $3.759 Tuesday and $3.671 last week.

But not all consumers noticed the increase.

"I didn't realize. I just looked and I was, like, wow," said North Naples resident Natalie Capone, who paid $3.89 at the 7-Eleven at Creekside Trail and Immokalee Road.

Rick Beel said he noticed as he drove to work Wednesday and saw gas going for $4.09 at a station on U.S. 41. Still, he said he wasn't too worried.

"It's going to ebb and flow," Beel said. "There's less supply coming into the state, so they're going to raise prices to lower demand. It's simple economics."

According to the website NaplesGasPrices.com, local gas stations were charging $3.74 to $4.09 per gallon Wednesday.

The wide storm shut down several refineries along the Gulf Coast and others are operating at reduced rates. In all, about 1.3 million barrels per day of refining capacity is affected. So, it's no surprise that drivers in Louisiana, Alabama, Mississippi and Florida saw gas prices rise by a dime or more in the past week.

But some states in the Midwest are suffering even more dramatic spikes. Ohio prices jumped 14 cents, Indiana prices soared 13 cents and Illinois prices jumped 10 cents on Wednesday alone according to the Oil Price Information Service. Days before Isaac is expected to douse those states with rain, the storm forced the shutdown of a pipeline that serves a number of Midwest refineries.

Drivers in the region were angry and confused.

"I saw gas in my neighborhood for $3.56 a gallon just Tuesday morning, and now I'm paying $3.95. It's terrible," said Mary Allen of Cincinnati.

As Isaac fades away, the summer driving season ends, and refiners switch to cheaper winter blends of gasoline, stations owners should start dropping prices. "There is some very good relief in sight," DeHaan says.

When Katrina hit in 2005, the national average for gas spiked 40 cents in six days and topped $3 per gallon for the first time. Isaac likely won't have the same result, though its full impact on the refineries is yet to be determined.

The refineries are not expected to suffer long term damage. But refiners decided to shut down or run at reduced rates to protect their operations.

These facilities consume enormous amounts of electric power and generate steam to cook crude oil into gasoline, diesel, jet fuel and heating oil. If a refinery loses power suddenly, operators can't properly clear the partially cooked oil out of pipes, and re-starting the refinery can take several days or even weeks.

In advance of Isaac, refineries instead conducted what is known as an orderly shutdown, so they can re-start as soon as the power supply is assured again. The Gulf refineries will likely stay off line for about three days.

Isaac cut into the amount of gasoline being produced, and raised fears that supplies could fall dangerously low if the storm proved worse than expected. When supplies drop or are threatened, wholesale prices rise. Then distributors and station owners have to pay more to fill up their station's tanks. They then raise their prices based on how much they paid for their current inventory, how much they think they will have to pay for their next shipment, and, how much their competitors are charging.

Prices spiked particularly high in the Midwest because Isaac forced Shell to close a pipeline that delivers crude from St. James, La. to refineries in the region.

Gasoline prices are particularly vulnerable to spikes around this time of year. Refiners keep a low supply of more expensive blends as driving season ends, knowing they'll soon be able to make cheaper winter blends of gasoline.

"We are really working with a just-in-time delivery system," said Tom Kloza, chief oil analyst at the Oil Price Information Service.

Pump prices were on the rise even before Isaac blew in. But prices could quickly come down if refineries can soon get up and running.

"Just as we are getting ready to head out the prices go up," said Sharon Simon of Gadsden, Ala., who is driving 900 miles north to her daughter's wedding in New York this weekend. "I'm fed up with the surge in price every time there is a holiday."

Daily News staff writer Jessica Lipscomb contributed to this report

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Discuss
  • Print

Related Stories

Related Links

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.

Features