Gas prices up, some shortages hit Dallas, Fort Worth in wake of Hurricane Harvey

A Valero oil refinery's flare continues to burn as Hurricane Harvey makes landfall in Corpus Christi, Texas, on Friday, Aug. 25, 2017. Hurricane Harvey smashed into Texas late Friday, lashing a wide swath of the Gulf Coast with strong winds and torrential rain from the fiercest hurricane to hit the U.S. in more than a decade. (Nick Wagner/Austin American-Statesman via AP)

Hurricane Harvey may have created a perfect storm leading to higher gasoline prices and some gas shortages in Texas and Louisiana and those shortages and increases may spread across the nation.

Gasoline prices in Texas and across the country have increased by at least 10 cents since Harvey came ashore and caused record flooding in places.

AAA Texas on Thursday reported the average price at the pump statewide was $2.26 per gallon. That’s 12 cents higher than a week ago, before Harvey made landfall, and 4 cents higher than on Wednesday.

The association survey says U.S. gasoline prices Thursday averaged $2.45 per gallon, which is 10 cents higher than a week ago and 5 cents more than on Wednesday.

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Of the major metropolitan areas surveyed in Texas, drivers in Dallas are paying the most on average per gallon at $2.37, while drivers in Beaumont are paying the least at $2.17 per gallon. The national average price for a gallon of regular unleaded is $2.45, which is five cents more than yesterday and 10 cents more than the price per gallon at this same time last week.

The supply crunch is already being felt in Dallas-Fort Worth, where QuikTrip, one of the nation’s largest convenience store chains, is temporarily halting gasoline sales at about half of its 135 stores in the area.

The company is instead directing gasoline deliveries to designated stores across all parts of the metro area, QuikTrip spokesman Mike Thornbrugh said. And while only half the Dallas-Forth Worth area stores will have gasoline, all will remain open, he said.

“Supply is way, way off,” Thornbrugh said Thursday.

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The Tulsa-based company diverted gasoline deliveries in a similar way last year in metro Atlanta, where it has about 133 stores, after the Alabama pipeline spill.

Patrick DeHaan, senior petroleum analyst at Boston-based GasBuddy, a smartphone app for tracking gasoline prices, said gas prices are surging in the Dallas-Fort Worth area and that will continue. “Prices have already gone from $2.14 a gallon to $2.40. That’s a big jump,” he said.

The operator of a major gasoline pipeline estimates it can resume carrying fuel in the Houston area by Sunday, potentially avoiding a lengthy shutdown that would intensify gasoline shortages.

The Colonial Pipeline provides nearly 40 percent of the South’s gasoline. It runs underground and is now under water in many parts of Texas, where inspections are needed before it can be fully operational again, Colonial spokesman Steve Baker said Thursday.

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The Georgia-based company remains able to operate its pipeline from Louisiana to states east and northeast of there, though deliveries will be “intermittent,” the company said.

“We’re on the brink of a crisis,” DeHaan said. “Some refineries are still operating, but demand is exceeding supply by 2 million barrels a day and that’s adding up.”

The key will be getting the Port of Houston open so those refiners that are open can begin to process fuel again, he said.

Corpus Christi refiners appear to have survived without major incidents or damage, according to Daniel Armbruster with AAA Texas. Many refineries are restarting, including Valero’s Three Rivers Corpus Christi refineries, though the re-start is expected to take a week to complete, he said. In the Houston area, it is still unclear when refinery damage will be assessed and local roads will be cleared and deemed safe by first responders. Currently, OPIS has received reports of minor damage at a few Houston area refineries (fire, flooding at some plants).

“No doubt, Harvey has impacted operations and access to refineries in the Gulf Coast. However a clear understanding of overall damage at the Houston area refineries is unknown,” said Armbruster. “Despite the country’s overall oil and gasoline inventories being at or above 5-year highs, until there is clear picture of damage and an idea when refineries can return to full operational status, gas prices will continue to increase.”

Harvey made landfall along the Texas coast last Friday and lingered in the region for days, causing catastrophic flooding, killing at least 31 people and causing major disruption to the region’s energy sector. – The Associated Press contributed to this report