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Shortages, Price Hikes Follow Ike in Southeast

Consumers fill up as supplies run short

By Joe Benton
ConsumerAffairs.com

September 16, 2008

Gasoline stations throughout the Southeast and are reporting sporadic shortages and price spikes as the surge in average pump prices leveled off at $3.854 a gallon.

The Sheetz convenience store chain reported supplies will be tight for several days at some of its outlets following the disruption caused by Hurricane Ike.

The Altoona, Pennsylvania retailer reported that 25 to 30 Sheetz outlets in Maryland, North Carolina and Virginia are out of gas because of the closure late last week of the Colonial Pipeline from the Gulf Coast.

The American Automobile Association (AAA) reported that the pipeline has restarted both its main gasoline and distillates lines but they are flowing at a reduced rate which could squeeze spot supplies and continue to bring sharp price spikes in the Southeast.

"Supply problems do exist, but not shortages. This is a temporary situation which will resolve itself over time," Windy Van Curen, spokesperson for AAA Mid-Atlantic insisted.

"Motorists are urged to resist the urge to top off their tanks unnecessarily, which will only aggravate the situation. We also encourage retailers to exercise restraint when raising gas prices," Van Curen said.

With hurricane force, $4 gas returned to Alabama, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, South Carolina, and Tennessee, all served by the Colonial Pipeline.

Some gas stations around Greensboro and Winston Salem, North Carolina had plastic bags covering pumps because of fuel shortages but AAA Carolinas insisted gas is available in North Carolina.

"Damage to the Texas area refineries and Gulf of Mexico oil rigs appears to be minimal and gasoline deliveries will get back on track soon," said David E. Parsons of AAA Carolinas. "During the next few days, availability will be sporadic and prices will remain high."

A Costco gas station near Greensboro had only premium fuel remaining Monday. The Circle K in High Point reported the station was out of fuel with the exception of diesel since Friday.

Officials in Murfreesboro, Tennessee met Monday to plan temporary cutbacks to save gas until a local the shortage eased, according to a city spokesman.Police officers were encouraged to conserve fuel in Murfreesboro when possible, he said.

In Southwest Florida several gas stations ran out of gas or were short in supply. The local Costco ran dry and a Racetrac convenience store had bags covering about half the pumps.

Rumors of a gas shortages fueled panic in Gainesville when one gasoline retailer put out a sign warning of fuel shortages and the possibility of $5.50-a-gallon prices.

Similar fears swept the Orlando area following reports that the Pantry convenience store was urging customers to voluntarily limit purchases to 10 gallons.

In Southern Virginia, one Pilot station charged $4.69 for regular self-serve Sunday. Pilot's corporate headquarters said the price was an effort to insure that stations had gas to sell.

"We believe the situation is temporary," Pilot said. "We look forward to being able to purchase our petroleum products at a lower cost, which we will pass along to our customers."

AAA Mid-Atlantic warned that consumers would face spot shortages throughout much of Virginia. "In the wake of Hurricane Ike, empty or bone-dry pumps are cropping up at gasoline stations in and around Richmond as well as in southern Virginia," AAA reported. "It is something consumers haven't seen since Hurricane Katrina struck three years ago," AAA said.

Gas station owners earn a few cents of profit on each gallon of gas and many of them were faced with unexpected price increases. Some retailers faced sharp price increases from suppliers. One independent owner in Southern Virginia ordered a delivery Saturday and was charged $4.945 a gallon by the supplier.

When supply is low and retailers are uncertain when they'll receive their next gas shipment, independent station operators sometimes raise gas prices to maintain their supply longer in an effort to keep business at their convenience store.

"Since Friday, when Hurricane Ike was approaching its landfall stage, pump prices have shot up 24 cents to a $3.78 per gallon across Virginia," AAA reported.

"So far, we have gotten relatively few complaints of price gouging, yet we have also seen examples of retailers making tremendous sacrifices to avoid passing on price spikes to their customer base," AAA said in a statement. "One major gasoline retailer told AAA it received a shipment over the weekend priced at $4.50 at the wholesale level, yet it ate much of the markup to keep its customers from going elsewhere. Most filling station operators don't have that option or luxury and consumers will end up paying more for gas in the short term, at least."

The state office in Virginia that monitors price gouging received more than 1,300 complaints of price gouging according to a spokesperson at the Virginia Office of Consumer Affairs.

Some stations in the state increased prices by more than a dollar a gallon in just a few hours, the spokesman said.

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