Hike in gasoline prices is short term, analyst says
dkhoriaty/iStock/Thinkstock(NEW YORK) — Gasoline prices are rising as a direct result of Tropical Storm Harvey, and drivers filling up at pumps around the country could soon see an uptick of 15 to 25 cents per gallon.
“The biggest problem right now is there’s not enough gasoline being produced,” said Patrick DeHaan, a senior petroleum analyst for GasBuddy, a gas price-tracking app. “This is a market at work.”
The size of the storm is one thing, but the gas industry was already maxing its output before Harvey made landfall in Texas last Friday, DeHaan explained.
Refineries throughout the country last week were already at 96.6 percent of their operable capacity, according to an Energy Information Administration report that was released today.
The storm has knocked out “over 25 percent of the nation’s [refinery] capacity. Something’s got to give, and in this case, prices are going up,” DeHaan said.
The high mid-90s output percentage for refineries at this time of year is normal because “demand from motorists peaks during the summer,” DeHaan added.
But he also warned Americans to be careful to place the blame on oil companies.
“So many Americans think oil companies are raising prices simply because of a hurricane and nothing can be further from the truth,” he said.
He continued, “As gas prices go up refineries around the globe are seeing incentives to send gas to the United States. With this whole tip in the balance in which the U.S. is in a deficit of gas production, and the price of gas is soaring — that’s drawing the eye of gas refineries around the globe.”
DeHaan said the fact that international reserves are en route underscores the “severity of the situation.”
Jeanette Casselano, a spokeswoman at AAA, said gas prices were already expected to rise over Labor Day Weekend as far back as July.
“We were already forecasting prices to go up 5 to 15 cents per gallon,” she said. “Harvey has helped speed that along even more.”
The nationwide average right now, she said, is $2.40 per gallon. The average highest price recorded at the pump was $2.42 per gallon in March.
“We are pennies from that,” she added.
While Harvey’s refinery shutdown and Labor Day’s arrival could push gasoline to a two-year high of $2.50 per gallon, Casselano said they will come down.
“We’ll see prices increase, but it’s just short term,” she said. “The only lasting impact is if refineries are out for months.”
At a Pilot gas station in San Antonio, Texas, the price for a gallon of unleaded gas has already spiked 16 cents, to $2.25.
“It did go up fast,” station attendant Kayla Talamantez told ABC News. “Two days ago, it was $2.09 per gallon.”
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