September 18, 2008

Some States Still Have Gas Shortages

By Paul Davidson

Parts of the USA are still running short of gasoline five days after Hurricane Ike knocked out 20% of the nation's refining capacity.

The crunch is especially severe in the Southeast and Mid-Atlantic, which get their gas through pipelines from the Gulf region. It's largely hitting stations and convenience stores not affiliated with big brands such as ExxonMobil.

The shortages continue as oil prices rose nearly 7% Wednesday, with investors fleeing stocks amid Wall Street turmoil and returning, if only briefly, to commodities. U.S. crude oil prices settled at $97.16 a barrel, up $6.01. Oil prices had skidded for two months on weak demand and a strengthening dollar.

Nationwide, prices for regular gasoline averaged $3.855 a gallon, up 20 cents from a week ago, AAA says.

In South Carolina, many stations are running dry, though the situation improved Wednesday as oil companies started drawing from gasoline reserves, says Michael Fields, head of the state Petroleum Marketers Association. Premium gasoline is especially scarce. Previously, he says, most stations could not even get regular.

"We aren't seeing quite as many bags on the nozzles," he says.

About half of Mapco's 500 stations in the Southeast had no gasoline after Ike hit, says company spokeswoman Paula Lovell. Many were still dry Wednesday, but supplies have increased, she says.

In Virginia, about 15% of stations have no gas, though distributors are scrounging in other states for fuel. "People are going to Maryland, Pennsylvania and all the border states to pick up product," says Mike O'Connor, head of the state Petroleum, Convenience and Grocery Association.

Many unbranded pumps are down because stations refuse to pay wholesale prices that are at least $1 higher than those charged to branded affiliates. That's largely why about a quarter of Sheetz convenience stores in Maryland, North Carolina and Virginia had no gasoline, says co-owner Louie Sheetz. "It's an unfounded price point (oil companies) were putting on it," he says. "They said, 'How bad do you want it?' I said, 'Not that bad.'"

Sheetz says the stations were pumping again Wednesday as wholesale prices fell.

Meanwhile in Florida, some schools are grappling with a shortage of diesel fuel for buses. School districts in Orange and Seminole counties have canceled all field trips.

Twelve refineries along the Gulf are still shut down after two restarted, the Energy Department said. Much of the capacity will likely be back online in 10 days or so, the agency says. The Colonial Pipeline, the nation's largest, which serves much of the Eastern USA, is operating at a reduced rate. (c) Copyright 2008 USA TODAY, a division of Gannett Co. Inc. <>