Prices shot up as much as 40 cents a gallon Wednesday at many stations and another 10 cents Thursday, topping out at $3.09 a gallon. Analysts are predicting that prices could go even higher before the crisis subsides in the wake of the catastrophic blow from Hurricane Katrina.
A number of gas stations around the state, including several in Moore County, have run out of regular unleaded gas.
Gov. Mike Easley on Wednesday urged all North Carolinians to conserve gas. On Thursday, the Moore County Chamber of Commerce issued a “critical action alert” asking its members to curtail all nonessential travel to help ease the situation.
The county also announced Thursday that it was taking measures to conserve fuel by limiting services to essential functions only, such as public safety, urgent repairs to water and sewer systems, child protective services and building inspections.
Moore County Transportation Services will continue medical trips and trips to the Department of Aging nutrition sites.
There was some good news Thursday afternoon. The two major pipelines that supply the terminals and distribution centers in the Eastern United States were resuming operation, at least on a limited basis.
“That will help,” said Frank McNeil Jr., president of McNeil Oil Co. in Aberdeen. He is also president of the North Carolina Petroleum Marketers’ Associat-ion. “The situation should get better. It could have been a lot worse had they stayed shut down much longer.”
Katrina forced operators to close more than a 10th of the nation’s refining capacity and about 25 percent of its oil production due to power outages, which have sent gasoline prices soaring.
Some stations in Moore County actually raised prices at least twice during the day Wednesday, first going from $2.57 or $2.59 a gallon to $2.79 by midday, then jumping another 20 cents before day’s end.
Soaring prices and fears about widespread shortages have touched off a wave of panic in some areas as people tried to fill up and even stock up before prices skyrocketed again. Temporary shortages at the pumps are expected until the refineries resume production.
“The supply stream is so tight, so precise, that when you interrupt it, it is hard to catch up,” McNeil said Wednesday after returning from a meeting in Raleigh. “There are two pipelines that come up into North Carolina, Colonial and Plantation. They haven’t sent anything in several days. That is why the prices have shot up. It is going to be pretty tumultuous for the next few days.”
The two pipelines supply about 90 percent of the state’s gas , according to Easley’s statement. He said most distributors have about a week’s supply.
“I am asking all North Carolinians to conserve gas,” Easley said. “Some stations are already out. ... We are taking steps to ensure that emergency vehicles have the supplies that they need — police, fire and rescue. I am immediately suspending all nonessential state government travel. I am asking state employees to carpool wherever possible.
“I am also asking all our citizens to be smart about their fuel consumption. I am asking them to carpool if they can and to limit nonessential road trips. We are not out of gas, but we are running low. We must take steps to conserve our resources while we learn the full extent of the problems and while Washington works toward a regional and national strategy. With careful use of precious fuel, consumers can help us weather this latest storm.”
McNeil agreed that the only thing that will help the situation is for people to cut back on driving, at least temporarily, if at all possible.
“The biggest thing is consumption,” he said. “If people can make a concerted effort to cut consumption by about 10 percent, you won’t have shortages. This is a short-term situation. It is going to be a mess for a while, but this is a temporary thing.
“Once the refineries are back up and running, things will get better.”
McNeil Oil distributes Exxon, Pure and BP gas and operates five Mac’s Food Stores. Clerks at many convenience stores are bearing the brunt of some of their customers’ frustrations.
“It’s not local,” McNeil said. “It is beyond our control. We have to pass along these increases. We can’t sell it for less than we pay. You can’t stay in business. We want to see prices come down as soon as possible just like everyone else. This is affecting everyone’s pocketbook.”
McNeil said fees charged by credit card companies also take a cut, ranging from 2.5 percent to 3.5 percent.
“When gas was $1 a gallon, it was not that big of a deal,” he said. “Now it is.”
McNeil said it is impossible to predict when the price will at least level off or start to come down.
He said President Bush’s decision to release oil from the nation’s emergency stockpiles will help, at least “psychologically.” The price of crude oil fell in response to the president’s decision.
“The problem isn’t crude oil,” he said. “It is the lack of refined products, like gasoline. They can’t produce until power is restored.”
McNeil said the “speculators are killing us,” referring to gasoline futures.
“The biggest thing will be getting these refineries back up and running,” he said. “Hopefully that will happen in the next few days.”
Hammered by high gas prices, Labor Day automobile travel is expected to be down in the Carolinas this year for the first time since the summer following the 9/11 attacks, according to AAA Carolinas. The survey was taken before Hurricane Katrina struck.
“Hurricane Katrina will undoubtedly further depress travel this Labor Day weekend as the shutting down of refineries and oil wells puts upward pressure on gas prices in the Carolinas,” said David E. Parsons, president and CEO of AAA Carolinas. “We expect gas prices to increase significantly.”
The Travel Industry Association of America conducts travel research for AAA and found the Southeast was the only region in the United States where travel plans showed a decline this year.
“After a summer of high demand for fuel, gas prices have reached a level that forces many motorists to reconsider travel plans,” Parsons said.
