CHARLOTTE, N.C. — Although gas prices in the Carolinas have remained stable during previous weeks, motorists could soon feel the effects of Hurricane Ida in the form of spikes at the pump, depending on the damage to the Gulf Coast supply chain.
“Motorists will likely see gas prices fluctuate leading into Labor Day weekend because of Ida’s effects on the Gulf Coast,” said Tiffany Wright, spokesperson, AAA – The Auto Club Group in the Carolinas. “Where gas prices go from here will depend on the extent of the damage and how long it’ll take for production and transportation lines to return to normal.”
Colonial Pipeline temporarily shuts down part of its gas lines due to Ida
Hurricane Ida made landfall along the Gulf Coast Sunday afternoon, a region populated with offshore oil rigs, coastal crude oil refineries, terminals and ports. Refineries in Louisiana, Mississippi, Texas and Alabama account for more than 45% of the nation’s capacity for refining crude oil into gasoline and other important products. Additionally, the region is home to nearly 2,000 offshore oil platforms, which accounts for 17% of the nation’s crude oil production.
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As a precautionary measure, Colonial Pipeline announced on Sunday that they shut down two main lines that run from Houston, TX, to Greensboro, NC. The company added that following an infrastructure inspection after the storm, the pipeline would be back to full service.
By Monday evening, plans were in place to restore the pipeline to full operation.
Gas prices nationally, especially in the Southeast and East Coast, will see a minimal impact at the pump if the pipeline is down for a matter of hours versus days.
Currently, North Carolina’s gas price average sits at $2.88, seeing a 1-cent increase on the week. This is 4 cents cheaper than a month ago but 75 cents more expensive than last year. South Carolina’s gas price average sits at $2.84, seeing a 2-cent decline on the week. This is 3 cents cheaper than a month ago but 84 cents more expensive than last year. South Carolina is a part of the nation’s top 10 least expensive markets.
Gas prices at 7-year high for Labor Day travel, but fall relief is expected at the pump
The national gas price average decreased by two cents as of Sunday, the cheapest price since early July, but was back up a penny to $3.15 Monday morning following Hurricane Ida. The increase is expected as a storm like this can cause an increase in demand, due to panic buying, leading up to the storm. However, we are likely to see a dramatic reduction in demand post-hurricane as people stay home due to power outages and road closures.
Crude prices increased as production ramped down ahead of Hurricane Ida making landfall. As the storm continues, over 95% of oil production in the Gulf Coast region remains shuttered. In addition, the federal Bureau of Safety and Environmental Enforcement reports that 288 out of 560 manned offshore platforms have been evacuated; all 11 of the non-dynamically positioned rigs have been evacuated; and 10 of the 15 dynamically positioned rigs have moved out of the storm’s path as a precaution. For this week, crude prices will likely increase, at least temporarily, in response to reduced supply. However, as the storm clears and damage is assessed, production will gradually return to normal operations and help to stabilize prices as supply increases.
For updated state and metro prices, go here.