Florida Gas Crunch
"Imperfect storm of events" closes stations, pinches supply for unbranded retailers
BROOKLYN PARK, Minn. -- Florida unbranded gasoline retailers are feeling the pinch on fuel supply, and likely won't find relief until after Easter, according to a report from GasBuddy.com.
"There has been a somewhat imperfect storm of events that have led to wholesale tightness in fuel, and in some cases, closed stations or at least sporadic outages, particularly for the unbranded gasoline c-stores like 7-Eleven and Circle-K," said Gregg Laskoski, senior petroleum analyst for GasBuddy.com, a provider of fuel-price intelligence.
In a blog post, senior analyst Patrick DeHaan noted that fuel prices in Florida have risen quickly, especially for unbranded gasoline.
Several factors are at play, including:
- Low supply. As the state transitions to summer blend gasoline with another 40 days left to finish the process, gasoline inventories are "hand-to-mouth," DeHaan said. Meanwhile, there have been unconfirmed reports of delayed gasoline shipments from Houston or New Orleans to Tampa, Fla., because of heavy fog in the Gulf of Mexico. Gasoline imports from offshore sources are very low, a trend that could continue into the second quarter, according to GasBuddy analysts.
- Ethanol scarcity. Ethanol supply through the East and Gulf Coast is problematic right now because of rail bottlenecks, especially south of Orlando. DeHaan said that the price for ethanol in Florida is currently around $3.75 per gallon, adding 6 to 7 cents per gallon (CPG) to the price of gasoline.
- Logistical issues. Petroleum transports have been tied up moving jet fuel from Cape Canaveral, Jacksonville or Orlando to Tampa, DeHaan said. Some of these same trucks also move gasoline from terminals to gas stations.
- High demand. While most of the United States is seeing flat fuel demand, Florida is experiencing its busiest gasoline demand month in the last six years because of the harsh winter. GasBuddy analysts said that they expect demand to remain elevated until the week after Easter.
- Unbranded gas availability. With major oil companies dominating logistics, branded stations have typically had supply; however, unbranded companies--Circle K, 7-Eleven and others--have had to scramble to source finished gasoline, or gasoline blendstock and ethanol, according to DeHaan. While unbranded retailers may face outages, major brands may be pricing below big-box retailers and unbranded chains such as Raceway.