Gas prices skyrocket, with more gains expected for Labor Day weekend

Gasoline at the pump skyrocketed overnight, with the national average rising 7 cents per gallon by Friday morning, and more gains expected over the Labor Day weekend as refineries remain shut down by Harvey.

According to AAA, the national average rose to $2.51 per gallon for unleaded gasoline Friday, up from $2.44 Thursday and $2.33 before the hurricane hit the Gulf Coast. In some areas, prices jumped by double digits overnight, and there could be more sharp, but temporary gains ahead as distributors struggle with reduced supplies.

Prices should continue to rise into next week, but are expected to level off and back down as refineries come back online and gasoline moves through the system, analysts said. The national average could rise as much as 20 to 30 cents more before it begins to steady.

Refineries reduced their processing by about 5 million barrels a day as facilities from Corpus Christi, Texas, to Lake Charles, Louisiana, cut back or shut down.

“We’re about to get close to 1.4 million barrels a day of refining capacity starting up imminently, if not already in the throes of starting up,” said Andrew Lipow, president of Lipow Oil Associates. He said refineries in Texas City are about to come back up as is the Valero refinery in Houston.

In some markets where the flow of gasoline is not as abundant as it had been, prices were up much more. In Missouri, pump prices jumped 9 cents since Thursday, to $2.38 per gallon, up 25 cents in the past week.

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In northern Texas, prices were also much higher. Motorists were lining up for gasoline in Dallas, where prices jumped from an average $2.37 per gallon Thursday to $2.52 per gallon by Friday, according to AAA.

“Part of it is Dallas is supplied by a pipeline from Corpus Christi, and of course those pipelines have been down,” said Lipow. “There was a social media explosion of panic, so everyone went to the gas station. Supplies are going to be tight but they’re going to get better.”

In South Carolina, the price of unleaded averaged $2.38 per gallon by Friday morning, up 12 cents from Thursday. The Southeast is served by the Colonial Pipeline which was operating but at a lower volume. In Atlanta, the average price was $2.50, up 11 cents from Thursday.

The Motiva refinery in Port Arthur, the largest U.S. refinery , could be down for a month, Lipow said. “That’s based on the fact that it’s going to take two weeks to assess damage and at least two weeks to get back on stream,” he said.