Motorists on the East Coast have already begun to see rising gasoline prices as the shutdown of the Colonial Pipeline stretches into a fourth day.
Prices are likely to rise even more in the coming days as less fuel makes its way from Texas to the New York area through the pipeline. Operators say it will be the end of the week before the flow of gasoline resumes.
The company shut down the pipeline late Friday after hackers breached Colonial’s system with ransomware. No vital systems were apparently compromised, but operations were shut down out of an abundance of caution.
The 5,500-mile pipeline supplies fuel to the New York City metro and dozens of markets in several states in between the Gulf Coast and depots in New Jersey. The FBI says an Eastern European criminal gang known as Darkside was responsible for the hack.
Hacker group apologizes
In an odd turn of events, the group issued a statement Monday saying it did not intend to cause a disruption in the movement of vital fuel supplies. The group reportedly developed the software and sold it to other criminal operators, and it denies being connected to any foreign government.
“We are apolitical, we do not participate in geopolitics,” the group said in the statement.
That’s small consolation for consumers who will likely face rising gas prices until the pipeline returns to normal operations. The AAA Fuel Gauge Survey shows that the national average price of regular gas is $2.98 a gallon, rising two cents a gallon in the last 24 hours. It’s up seven cents a gallon in the last seven days.
“This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally,” said Jeanette McGee, a AAA spokesperson. “Areas including Mississippi, Tennessee, and the East Coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week.”
The average gas price in Georgia surged 11 cents a gallon in the last 24 hours. Mississippi and Tennessee have seen prices rise three cents a gallon over the same time period.
Shortages could be another problem. Patrick DeHaan, head of petroleum analysis at GasBuddy, reports that 5% of Virginia stations had run out of fuel by late Monday.
Most of the price impact will likely fall along the pipeline’s route. AAA says foreign gasoline imports and other pipelines can supplement Northeastern supply. Other areas of the country should see little impact. However, the national average price of gasoline is poised to go over $3 a gallon this week for the first time in years.