From North to South

Retailers, politicians urge conservative gasoline use

OAK BROOK, Ill. -- From coastal areas in Florida and Texas to less-expected locations such as Detroit and Ontario, panic buying and gasoline outages seemed to be the norm Friday afternoon as Hurricane Rita closed in on the Texas-Louisiana coast.

Ultimately, just where Rita's wandering eye would hit land was expected to determine whether retailers would face a small and temporary bump in gasoline supply and prices or be left scrambling over a period of weeks. Best case, it costs us 2 million barrels a day [of refining production] for about three days, [image-nocss] resulting in gas prices briefly rising 5 to 15 cents per gallon, Fadel Gheit, an energy analyst for Oppenheimer & Co., New York, told the Associated Press. But if it hits Houston hard, four or five refineries could be flooded. Gheit declined to offer a price forecast for the worst-case scenario.

Energy Secretary Samuel Bodman said even if the Gulf Coast refineries escaped serious damage, the public should be ready for interruptions of supplies for two or three weeks. We will be dependent on attracting cargoes [of gasoline] from abroad which are already en route, he said. Later, an Energy Department spokesperson clarified Bodman's remarks, saying he was referring to local disruptions in Texas and that the administration does not expect a significant effect nationwide.

Regardless, consumers were already rushing to fill their gas tanks late last week, preparing for the worst after seeing the effect Hurricane Katrina had on gasoline prices a month ago.

In Houston, Shell Oil Products US announced on Thursday that many of its stations in the area had run out of fuel as thousands of people swarmed highways to escape the approach of Hurricane Rita. We are experiencing product run-outs at Shell-branded stations in the area, the company said in a statement. Members of Shell's retail staff are working diligently to help resupply Shell stations as quickly as possible. We are making every effort to navigate current road conditions and deliver gasoline in a safe and efficient manner. In Detroit, the underground tanks at some gas stations ran dry Thursday as motorists hurried to beat the inevitable price spike at the pump, according to a report in the Detroit News.In the Maritimes region of Canada, just northeast of Maine, gasoline stations saw pump prices jump as consumers resorted to panic buying as they feared another imminent spike in fuel costs, according to a Canadian Press report. There are a lot of folks out there who are running to get to a gas station and I would suggest that they shouldn't panic, Steve Ecclestone, general manager of Montreal-based refiner Ultramar, told the Canadian news service. It's crazy. It's just a lot of fear, panic and rumors going on.And in Florida, Governor Jeb Bush urged conservation and calm in light of what he warned could be significant gasoline shortages statewide if Hurricane Rita dealt a second severe blow to the Gulf Coast's fuel industry, according to the Miami Herald. We in all likelihood are going to have significant shortages of gasoline, Bush told reporters in Tallahassee, as the Category 4 hurricane churned toward the nation's largest cluster of gasoline refineries. I would urge people to recognize this, not to hoard, not to top off every tank that they have.

While Hurricane Katrina and, likely, Rita did limit the amount of refined fuel available to consumers, retailers said ultimately, it's the consumers themselves that control the issue in each market. If people will just act conservatively, fill up only when you need to, they'll be OK, Linda Casey, a spokesperson for Marathon Petroleum Co., told the Indianapolis Star.