A number of East Coast gasoline stations are coming up empty, saying that panic buying is causing fuel shortages. The recent cyberattack on the Colonial pipeline, a 5,500-mile system that carries fuel to the East Coast, is causing the frenzy.
Gas Outages, Higher Prices Due to Panic Buying
As of Tuesday morning, six states along the hacked pipeline operated by Colonial Pipeline Co. are experiencing shortages in fuel products. Amounts vary per state, ranging from less than a percent in Alabama to 7.6% in Virginia.
This is according to GasBuddy analyst Patrick De Haan. However, the rate keeps rising as the pipeline remains shut down. The critical Colonial pipeline runs from Texas to New Jersey and delivers nearly half of all refined fuel to the East Coast.
The shortages are pushing prices even higher on the already tight reserves. any motorists are reportedly panic buying and stocking up on fuel.
Last week, fuel demand from vehicle owners jumped by 30% on the East Coast, according to GasBuddy’s tracking. Meanwhile, fuel demand also rose 16% in the Midwest and 13% in the Gulf Coast.
Colonial Pipeline To Restore Service By Weekend
The management of Colonial Pipeline insisted that they will restore much of its service by the weekend. The company issued a statement updating the progress of the investigation.
“Colonial Pipeline is continuing to work in partnership with third-party cybersecurity experts, law enforcement, and other federal agencies to restore pipeline operations quickly and safely,” it said. At present, one pipeline stretched across from North Carolina to Maryland is running under manual control. Eventually, Colonial will reopen all sections.
Despite the update, many oil refiners and distributors remained frustrated by how Colonial shares its information. Energy Secretary Jennifer Granholm seemed to know something during a White House press conference Tuesday.
She said that Colonial’s CEO said the company will decide on restarting by the end of the business day Wednesday. Meanwhile, the Energy Department will instruct Colonial to direct its flow to hardest-hit areas. Granholm said that officials will monitor the situation on prices and panic buying.
Department to Monitor Against Hoarding and Price Gouging
In addition, the department will not tolerate any instances of price gouging, she said. “Just as there was no need to hoard toilet paper at the beginning of the pandemic, there should be no cause for hoarding gasoline, especially in light of the fact that the pipeline should be fully operational by the weekend,” Granholm said.
However, industry experts anticipate price fluctuations. Fuel products take an estimated 15 days to travel from Houston refineries to New York.
“This issue may be slow to improve even days after the pipeline reopens. Americans hoarding gasoline are running the system dry, a system that won’t be able to fully replenish retail stations for perhaps weeks, made worse by a shortage of tanker truck drivers,” De Haan shared in an email.
Rising Gas Prices
Meanwhile, the American Automobile Association reported Monday that the national gas price average jumped from $2.90 to $2.96. In a statement, the association expects prices to continue rising in response to the pipeline shutdown.
“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.
These states may see prices increase three to seven cents this week,” said Jeanette McGee, AAA spokesperson.
National average gas prices are on the rise since early this year. After enjoying low gas prices of as much as $1,75 last year, prices are now creeping to the $3 mark.
The reopening of the economy bolstered demand for fuel. At the same time, as more Americans receive vaccinations, the urge to travel is spiking up as well.
Watch the PBS NewsHour video reporting that panic buying is driving the fuel shortage after Colonial Pipeline hack:
Do you foresee a normalization of fuel prices later this week? Or, do you think that the Colonial pipeline’s problems are far from over?
Let us know what you think. Share your comments in the comment section below.