Delaware and Maryland drivers are seeing pain at the pump as with gas price averages increasing at least seven cents in many areas, Wilmington-based AAA Mid-Atlantic report.
The culprit is the shutdown of the Colonial Pipeline, which delivers about 45 percent of all fuel to the East Coast.
Over the weekend, Colonial announced it was the victim of a cybersecurity attack and, as a precaution, shut down the pipeline, which runs from Texas to New York Harbor.
Few details have been released since the attack took place.
Some lateral lines have reopened, but there is no word of when the main line, including the gasoline side will be operational.
The nation’s top 10 largest weekly increases: Michigan (+15 cents), Kentucky (+12 cents), Florida (+10 cents), Delaware (+10 cents), Indiana (+10 cents), West Virginia (+nine cents), Utah (+nine cents), Texas (+nine cents), New Jersey (+eight cents) and Pennsylvania (+seven cents).
During the week, the national gas price average jumped six cents to $2.96. If the trend continues, an increase of three more cents would make the national average the most expensive since November 2014 –the last time we saw average prices at $2.99 and higher.
“This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. 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,” said Ken Grant, manager of Public and Government Affairs for AAA Mid-Atlantic. “These states may see prices increase three to seven cents this week.”
The longer the pipeline is offline, the greater the impact on the east coast. However, foreign gasoline imports and other pipelines can supplement Northeastern supply. Other areas of the country will see little impact.
Delaware has its own refinery in Delaware City. However, refining capacity has dropped with the closing couple of years ago of the massive Philadelphia Energy refinery.
While there is sufficient gasoline supply in the U.S. at 235.8 million barrels, other pipelines and the Department of Transportation’s temporary hours-of-service exemption for tanker trucks transporting gasoline and other fuels, will be able to ease the strain, but not resolve the issues caused by the pipeline interruption. Once the pipeline is up and running, there could still be residual delays as it takes about 15–18 days for fuel to flow from Texas to New York.
At the close of Friday’s formal trading session, West Texas Intermediate Crude increased by 19 cents to settle at $64.90.
Market optimism that crude demand will recover, despite an uptick in coronavirus infection rates in other nations helped lift prices last week. Prices could continue to climb this week if the market remains optimistic as vaccines continue their rollout.
Prices increased after the Energy Information Administration’s (EIA) latest weekly report revealed that total domestic crude oil inventory dropped. If EIA’s next report shows another decrease in total domestic crude supply, crude prices could climb further this week.
