Prices at the pump have already risen in the area and could continue to do so in the coming weeks because of Hurricane Harvey’s wrath in Houston, some oil industry experts say.
With multiple oil refineries shut down in Houston because of hurricane damage and flooding, gasoline supply has dipped, causing gradual upticks in fuel prices. Still, unless the Friday storm caused significant damage to refineries and pipelines, gasoline supply and prices should return to normal in a few weeks, experts say.
According to statistics from AAA-Alabama, the average price for regular gasoline was $2.133 a gallon in the state Tuesday — up more than 1 cent from a week ago.
“Since Aug. 24 it's peaked up a little bit in Alabama … refineries had already started shutting down mid last week in anticipation of the storm,” said Patrick DeHaan, senior petroleum analyst for gasbuddy.com.
DeHaan said that because of the severe flooding, multiple refineries are expected to stay shut down for days if not weeks.
“You will continue to see gas prices climb because the amount of gas coming out of Houston will decrease,” DeHaan said. “The Gulf Coast will probably see a noticeable jump of 15 cents to 35 cents more a gallon.”
Clay Ingram, spokesman for AAA-Alabama, said his organization also believes gas prices will continue to rise in the state because of the hurricane, but couldn’t speculate on the size of the increase.
“I really don’t think we’re going to see anything crazy,” Ingram said of gas price increases. “But it really depends on how much damage was caused by the storm.”
Ingram noted that the country does have a large reserve of gasoline that can be used to help mitigate sharp fuel price increases.
“Gas and oil reserves in the country are at a five-year high,” Ingram said. “That gives us a nice cushion to help absorb some of the blow.”
Also, there is no expectation of a gasoline supply shortage in the state, Ingram said.
“There’s no need to rush out and fill up and hoard gasoline,” he said.
Brian Young, whose family owns 10 Grub Mart convenience stores across the state, including those in Calhoun County, said his stores have already seen a decrease in fuel supply because of the hurricane. As a result, wholesale fuel prices have risen and that increase will be passed on to consumers, Young said.
Young said he doesn’t expect too much of an impact on prices in the county.
“Unless there is structural damage in Houston, I see it being more of a hiccup, then it’ll settle into a more normal course of business,” Young said.
There are also other refineries in Louisiana that can help pick up the slack of those in Houston, he said.
“That will at least keep a steady flow and prevent any panic buying,” he said. “I don’t foresee a huge disruption in price if people don’t do any huge panic buying.”
Greg Brown, CEO of BR Williams, an Oxford-based trucking company, said he expects even a short-term fuel price hike to hurt his bottom line.
“Fuel is our second largest expenditure behind labor,” Brown said. “If it lasts upward of two or three weeks, it could impact us.”
Brown said the hurricane is already requiring some of his truckers to use more fuel than normal. Brown said his company routinely picks up automotive parts in Texas and delivers them to the Honda manufacturing plant in Lincoln.
“We’re having to travel farther north and around in Texas to avoid Houston,” he said.