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Rita Drives Up South Texas Gas Costs

Posted on: Friday, 23 September 2005, 18:00 CDT

Sep. 23--Hurricane Rita may not be headed for South Texas, but the storm may leave its mark on the Rio Grande Valley with price spikes and shortages of gasoline.

If the hurricane paralyzes oil refineries in Houston, there could be distribution problems, industry observers said.

Already, Rita has had an impact on gas prices. A gallon of regular unleaded gas that was $2.49 early Thursday was selling for $2.79 by noon.

Also, a Circle K at Seventh Street and 77 Sunshine Strip ran out of gasoline at about noon Thursday.

A store employee said they were told to wait for their turn because the distributor was shipping gasoline to the Houston area.

Bill Wright, of Wright Petroleum in Harlingen, said the hurricane had not yet impacted his company, which distributes fuel throughout the Valley and Central Texas.

WP buys gasoline from Valero Energy Corp., a San Antonio-based company with refineries in Houston, Texas City, Port Arthur and Three Rivers.

Valero officials said Thursday that the company was shutting down its two refineries in Houston and Texas City and was also in the process of shutting down another one in Port Arthur.

But the Corpus Christi and Three Rivers refineries will continue to run with skeleton crews, Mary Rose Brown, a spokeswoman for Valero, said in a statement posted on the company's Web site.

If the hurricane does not affect the Corpus Christi refinery, Wright said shortages for the Valley should be minimized.

He added, however, "if the refineries in the Houston area are damaged, that would, because some of the gasoline that comes here would have to be rerouted to other places."

Valero ships gasoline on barges to its terminal at the Port of Harlingen, where an average of four barges arrive every week, Port Director Butch Palmer said.

Each barge carries about a million gallons of gasoline, enough to fill about 60 tanker trucks.

Valero has a second terminal in Edinburg, where the fuel arrives there via pipeline.

Citgo, a Houston-based company, sends gasoline from its Corpus Christi and Houston refineries to a terminal at the Port of Brownsville.

"They do move a good amount of gasoline," Tony Rodriguez, the port's director of marketing, said. "From here, they distribute it all over the Valley."

He said that from January to July, about 20,000 trucks loaded up gasoline at the Citgo terminal.

Asked if the port had been impacted by the hurricane, he said, "Not yet."

"But it would be interesting to see what will happen if Houston gets a direct hit," Rodriguez said. "It could be devastating for the Valley economy."

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To see more of the Valley Morning Star, or to subscribe to the newspaper, go to http://www.valleystar.com.

Copyright (c) 2005, Valley Morning Star, Harlingen, Texas

Distributed by Knight Ridder/Tribune Business News.

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ATD, VLO,

Source: Valley Morning Star (Harlingen, Texas)

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