Even Higher Gasoline Prices, Some Shortages Feared

President Bush raised the possibility Wednesday that Hurricane Katrina will lead to even higher gasoline prices and shortages in some areas, even as his administration moved to release oil from an emergency government stockpile and to temporarily ease pollution standards on gasoline and diesel fuel.

Gasoline prices surged above $3 a gallon in many parts of the country and shortages cropped up in some areas as supply disruptions from Katrina widened and lines of motorists scurrying to top off their tanks overwhelmed some gas stations.

“Our citizens must understand the storm has disrupted the capacity to make gasoline and distribute gasoline,” Bush said in a Rose Garden speech after meeting with top officials to discuss the crisis.

“A lot of crude production has been shut down because of the storm,” Bush said after returning from his Texas ranch to oversee federal relief efforts.

The decision to tap the Strategic Petroleum Reserve was an effort to keep production of gasoline and other fuels steady.

Even so, gasoline prices leaped nationwide as the extent of damage to the nation’s oil-distribution network became more apparent. Key refineries and pipelines remained out of service, reducing fuel shipments to retailers.

Tapping the government reserves will “certainly help those companies and those refineries to function, whereas they wouldn’t be functioning without a supply of crude oil,” Energy Secretary Samuel W. Bodman told the Associated Press in an interview.

Gas prices jumped by more than 50 cents a gallon overnight in Ohio, 40 cents in Georgia and 30 cents in Maine. The increases followed price spikes on wholesale and futures markets after the hurricane knocked off-line refineries and pipeline links along the Gulf Coast that provide about a third of the country’s gasoline supplies.

Concerns are now mounting over limited supplies of gasoline, including the possible return of long lines and gas rationing reminiscent of the 1970s gas crisis.

“There is a possibility that we will see some form of rationing with the conditions being as bad or worse than many people thought,” said Fred Allvine, an oil industry expert with the Georgia Institute of Technology.

This week’s increase comes atop a 40 percent price rise in the last year that pushed up the average retail price of unleaded regular to $2.61 a gallon nationwide last week, Energy Department figures show.

Analysts said the squeeze should ease once electricity is restored to Gulf Coast pipelines and refineries. But it will be days before a full assessment of wind and flood damage can be done, and at least that long before pipelines and refineries return to service.

In Georgia, a few gas stations were charging as much as $6 per gallon after other retailers had run out of gas and long lines running into nearby streets were reported across the state. In response, Gov. Sonny Perdue signed an executive order authorizing state sanctions against gas retailers who gouge consumers.

“I’m frankly embarrassed for our state and some of our businesses that we have to do this,” said Perdue, after pleading with Georgians to remain calm.

A day after the Environmental Protection Agency announced it would temporarily allow the sale of higher-polluting gasoline in Alabama, Florida, Louisiana and Mississippi, it acted to ease certain restrictions on gasoline blends and diesel fuel in the rest of the country as well.

“This will help take some pressure off the gas price,” Bush said.