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Front Page September 15, 2008  RSS feed

Sticker Shoc k

Fears about Hurricane Ike cause gas prices to fluctuate wildly
By TIM GULLA Ledger Staff Writer tim@gaffneyledger.com

Reports of Hurricane Ike-related gas supply disruptions sent people throughout the Southeast racing to fill up on Friday. Extremely high demand then caused many gas stations to run dry, and spot prices for gas to jump more than a $1 a gallon in some places. Differences between chain stores and independent stores, as well as how much gas stores already had in their tanks compared to how much they had to buy, led to wide variations between pump prices around Gaffney. Photos show just how wide those variations could be, from the $3.42 a gallon price at Johnny Little's service station on North Logan Street to the $4.49 a gallon at a gas station near Old Post Road. Reports of Hurricane Ike-related gas supply disruptions sent people throughout the Southeast racing to fill up on Friday. Extremely high demand then caused many gas stations to run dry, and spot prices for gas to jump more than a $1 a gallon in some places. Differences between chain stores and independent stores, as well as how much gas stores already had in their tanks compared to how much they had to buy, led to wide variations between pump prices around Gaffney. Photos show just how wide those variations could be, from the $3.42 a gallon price at Johnny Little's service station on North Logan Street to the $4.49 a gallon at a gas station near Old Post Road. A drive by any gas station around Gaffney this weekend proved the pump panic striking the southeast did not spare Cherokee County.

As word trickled out Friday morning some regions were experiencing $5 a gallon gas and empty gas station tanks due to Hurricane Ikerelated supply disruptions, gas stations up and down Floyd Baker Boulevard, and those off major Interstate 85 exits like Hyatt Street, quickly became crowded parking lots as local residents and travelers alike rushed to fill up or, in some cases, stock up. With so much demand so quickly, wholesale spot gasoline prices jumped as much or more than $1 a gallon and most gas stations raised pump prices repeatedly Friday to keep pace as they waited for word on when new shipments would be arriving. In some cases, even new shipments became a guessing game.

Gas at the Murphy USA on West Floyd Baker Boulevard started at $3.55 a gallon early Friday and was up to $4.19 a gallon by Sunday. The Murphy USA gas station had run out of gas Friday afternoon but was able to secure a new shipment within a few hours. Even while all of its gas pumps were blocked off, dozens upon dozens of motorists continually pulled into the lot and circled the pumps. At least a dozen more people converged on the gas station when a tanker truck pulled up with the increasingly precious commodity.

After seeing the tanker truck come into the lot, local resident Roger Hannon pulled his pickup up to a pump at the Murphy USA and he and his family decided to wait, even after they were informed by gas station attendants it would be at least an hour before the pumps were turned back on. Hannon figured it was better to wait than miss out on a sure thing. Ultimately, they waited about 20 or 25 minutes before attendants pulled plastic garbage bags from the pump nozzles.

"I haven't seen stuff like this since I was a kid in the 70s," he said while referring to gas crunches in the 1970s that led to drastic measures like rationing. Like all the other motorists that were waiting for the Murphy USA gas station to restart business Friday afternoon, Hannon didn't know what the pump price was going to be.

"They might say $10 a gallon," he said with a laugh. "I guess I'll only get $5 worth. I'll make it home anyway."

He, like many others, was resigned to the fact that you still need gas to get around, no matter what it costs. When Murphy USA restarted its pumps Friday afternoon, the sticker shock was nowhere near as bad as many people expected as the gas prices, at least for the time being, remained below $4 a gallon. Elsewhere in the county, some independent stations were charging as much as $4.59 a gallon.

The vast difference in price between the fuel that gas stations already had in their tanks prior to Friday's run-up, and the skyrocketing wholesale prices the stations would have to pay for re-supply, led to some very wide variations in pump prices locally.

The Kangaroo Express on West Floyd Baker Boulevard had started Friday selling its regular gas at $3.55 and ultimately raised the price Friday afternoon to $3.73 while asking customers to limit their purchases to 10 gallons. Its tanks were dry by noon Saturday, however, and the large gas station remained out of the gas business until about 4 a.m. Sunday when a new shipment of regular unleaded arrived. New pump prices at the Kangaroo Express were set at $3.89 for regular unleaded, still lower than many nearby competitors.

The Blacksburg area was no less affected. Ted Darr, owner of Munchies, said he was forced to shut his pumps down for a brief period on Friday so he could adjust the pump prices after being informed that morning his next shipment of gasoline was going to cost his station $4.54 a gallon. "We're not even sure if we can get another load," he had said Friday morning.

While regular unleaded could be found at numerous locations on Sunday, some gas stations were running low or empty on mid and premium grades. The Fast Point gas station on Floyd Baker had its pumps covered up. The Kangaroo Express only had regular unleaded.

Immediately after problems became apparent Friday morning, both Governor Mark Sanford and state Attorney General Henry McMaster sent out warnings about price gouging at the pumps. Gouging is defined as the charging of an "unconscionable price" not attributed to additional costs or market fluctuations, according to the Attorney General's Office. There's no hard and fast rules on what constitutes gouging, however, and gas stations are allowed to pass on increases in the wholesale price to customers.

Still, McMaster said people can report "inordinate and suspected violations" to local law enforcement. His office also established a special email address — GasPrices@SCAttorneyGeneral. com, and an information line at (803) 734-3970. There was no word from either the Cherokee County Sheriff's Office or Gaffney Police Department that either agency had taken any formal complaints over the weekend.

The problems all stemmed from hurricanes in the gulf. Hurricane Ike shut down 14 refineries in Texas that account for about 20 percent of the nation's gas supply, which led to immediate supply disruptions and fears of long term supply problems as the hurricane passed and the damage was being assessed. Luckily, according to the Bloomberg news outlet, the damage to Texas refineries was not bad.

On Sunday, the price of crude oil for October delivery tumbled below $100 a barrel, the lowest price since last February, on news that most refineries escaped the brunt of the damage and should soon resume operations, Bloomberg reported. There was no firm word on when that would happen, however. The Associated Press still is reporting widespread power outages in the gulf region that could take weeks to fix.