3 Fuel Updates From Hurricane Irma

Samantha Oller, Senior Editor/Fuels, CSP

Hurricane Irma path

CHICAGO -- Hurricane Irma is projected to reach Florida this weekend, bringing the potential for catastrophic damage with its 185 mph winds. As residents prepare to hunker down or evacuate, panic buying is wreaking its own havoc on the state’s gasoline supply, according to several sources.

Here are three updates on how the fueling infrastructure is reacting as Hurricane Irma approaches ...

1. Supply and demand killers

Denton Cinquegrana, chief oil analyst for the Oil Price Information Service (OPIS), Gaithersburg, Md., told CSP Daily News that hurricanes tend to be more of a demand killer than a supply killer. Irma will likely live up to this reputation, since its current path does not jeopardize any key oil infrastructure.

That said, “Florida supply is in trouble with the anticipated jump in demand from people filling cars and cans for generators and first responders, etc.,” Cinquegrana said. “But also for roughly a week, the vessels that typically bring gasoline from the Gulf Coast to West Florida could not move [because of Hurricane Harvey hitting Texas], so that’s five to seven days where product was not making its way to Florida.”

Harvey has hurt in other ways, too.

“There is still a significant amount of refining capacity that is down, but it sounds like downtime will be measured in days and weeks and not months like originally feared,” Cinquegrana said. “With that said, it’s still going to create a supply crunch, and that is mostly going to be felt through the Southeast and Mid-Atlantic.”

The slowdown of the Colonial Pipeline proved to be a key aggravating factor. With refineries in the Gulf Coast shut down, not enough product was moving for the pipeline to operate at full capacity. This in turn delayed the arrival of product to the terminals.

Cinquegrana expects the national retail average price of gasoline, which was at $2.661 per gallon on Sept. 6, to rise and top off between $2.70 and $2.75 per gallon, before leveling off and declining. “You never say anytime is a good time to have a hurricane, but based on the calendar and the transition to winter-grade gasoline, it could help with supply and keep prices from moving much higher,” he said.

2. Fuel shortages

Fuel truck

Meanwhile, fuel shortages have already cropped up in Florida.

“What you’re seeing is a somewhat unique situation here in Florida with sporadic gas shortages,” James Miller, communications director for the Florida Petroleum Marketers Association (FPMA), Tallahassee, Fla., told CSP Daily News.

Usually when a hurricane is heading toward Florida, residents know ahead of time which region of the state it will likely hit, whether that’s South Florida, Tampa, Jacksonville, the Panhandle or other areas. This helps the fuel-supply infrastructure focus resources.

“Because there was so much uncertainty over [Hurricane Irma] in terms of exactly where it was headed, you basically had people in all 67 Florida counties acting as if the storm was headed their way and loading up on gas, water and food,” he said. “As a result, you’re seeing sporadic shortages in all areas of the state instead of region-specific.”

This in turn is creating logistical challenges for FPMA’s members, who are scrambling to transport gasoline to all areas that are short of fuel. This is done through trucks and tankers.

“As long as the ports remain open and the roads and bridges remain passable, then we’ll continue to restock stores with fuel,” he said. “Once Irma makes landfall, then we will pause any refueling until it has passed and it’s safe again.”

FPMA has been working with its members and local, state and federal authorities for the past week to plan for as smooth and streamlined of a re-entry after the storm as possible, “and that any resources, employees, etc. are permitted back into those regions to open up convenience and grocery stores that local residents rely on,” he said.

3. Station status

Station status

According to GasBuddy, many gas stations in the Southeastern United States have run out of gasoline in the wake of Hurricane Harvey and the preparation for Irma. As of Sept. 6, the cities seeing the biggest fuel outages are Miami, where 30% of stations tracked by GasBuddy have no gasoline, followed by West Palm Beach (29%), Fort Myers-Naples (20%), Tampa (13%) and Orlando (9%). The data comes from GasBuddy’s crowdsourced Gasoline Availability Tracker, where its fuel-price app members can report the fuel and power status of their local gas stations.

For the duration of Hurricane Irma, GasBuddy is also offering large retail chains free access to its Business Pages dashboard so they can update the fuel and power status of their sites through its Emergency Station Status Updater. Retailers interested in accessing the updater should contact GasBuddy at [email protected].

Meanwhile, fuel prices continue to react to Hurricane Harvey, with the national average jumping 25 cents per gallon (CPG) week over week to hit $2.64 per gallon, which is the biggest weekly increase since Hurricane Katrina triggered a 49-CPG jump in 2005, according to GasBuddy data. States seeing the largest weekly increases to their retail average were mainly east of the Mississippi River, led by Delaware (42 CPG), New Jersey (39 CPG), and Georgia, Maryland and New Hampshire, all with 38-CPG increases. In Miami, the average retail price as of Sept. 7 was $2.77 per gallon.