Hurricane Ike impacts gasoline supply, prices

FLORENCE — Whether you’re from Florence or just driving through the Pee Dee, the impact of Hurricane Ike can be felt at the gasoline pump from thousands of miles away.

Lines formed at many other Florence area gasoline stations Thursday as motorists scrambled to stock up on fuel.

It was a different story Friday, however.

Gasoline station employees said there’s no gasoline shortage in Florence, but several stations were out of gasoline Friday after Thursday night’s pump panic.

They said that’s because people were afraid there’d be a gasoline shortage because of Hurricane Ike, a massive increase in gasoline prices, or both.

Motorist Mike Fowler said he feels Hurricane Ike is being used to gasoline companies’ advantage.

“It was $3.30 when I left this morning. I got to here and it was $4 a gallon,” Fowler said Friday. “So it can’t be from the hurricane. It hasn’t hit yet. I think it’s a scam, using what they can to raise the prices.”

Jeff Lee’s Exxon on U.S. 52 still had gas to serve his customers Friday.

But among those tapped out Thursday night were Delmae Grocery on South Cashua Drive, the Sav-Way at Five Points, the Young’s on Hoffmeyer Road and the Shell at Hoffmeyer and West Evans Street.

Employees at Delmae Grocery said they expected to replenish the gasoline supply either Friday night or Saturday morning.

“A lot of people were afraid they weren’t going to be able to get gasoline, period,” Lee said. “They were filling up, bringing gas cans and stuff like that, and like I said, it was just panic buying.”

While Lee said the price increase during a hurricane is common, a panic leading to empty pumps was unnecessary.

“Lot of rumors, people just got scared when they said ‘shortages,’” he said.

People should expect local gasoline stations to have more gasoline in stock once their shipments arrive.

They also should expect an increase in prices, but nothing like what most experienced Thursday night.

“The run on gas stations in both Carolinas is creating a crisis before one actually exists,” David E. Parsons, president and CEO of AAA Carolinas, said in a press release issued Friday. “We are making a possibly bad situation reality when motorists top off their tanks.”

Officials with The Pantry Inc., which owns several gas stations in the Southeast, posted signs on the pumps at their Kangaroo stations — including those in Florence — asking people to limit how much gasoline they purchase.

Pete Sodini, president and CEO of the Pantry Inc., said the signs were an effort to thwart a public panic over gasoline prices.

“When we came in this (Thursday) morning and saw the conditions of the gasoline markets in the Gulf Coast we became concerned about the media picking it up and panic buying ensuing from that,” he said.

Gasoline prices in the wholesale market spiked Thursday afternoon as Hurricane Ike headed across the Gulf of Mexico toward Texas and its refineries, according to AAA Carolinas. That’s why some gasoline stations in the Carolinas began limiting the amount of a gasoline purchase and raising their pump prices.

AAA Carolinas is urging motorists to show restraint until the results of Hurricane Ike’s impact on the Texas refineries is assessed this weekend.

“The fear of what might happen if these refineries are severely damaged has caused widespread panic resulting in some stations running out of product, some stations raising prices dramatically in anticipation of high fuel replacement costs, and some stations trying to restrict the number of gallons being purchased,” Parsons said.

Sodini said some gas stations will be increasing their prices as a result of Ike.

“I think you will see in some markets $5 for gasoline,” he said.

While supply will be affected adversely by refinery shutdowns because of Ike’s approach, the duration and effect of Ike cannot be determined until after the storm has passed, AAA Carolinas said.

Parsons said most refineries made significant changes to their oil rigs after Hurricane Katrina three years ago and these upgrades are designed to protect against hurricanes.

Flooding and a loss of electricity are the biggest fears, he said.

South Carolina, like North Carolina, is in a state of emergency called for Hurricane Hanna, Parsons said. That means stations should not charge more for gasoline than what the gasoline in the ground cost the station plus the margin of profit that existed 60 days before the state of emergency was declared. 

“Until we know what the damage from Ike is, people should remain calm,” Parsons said.

If damage is minimal, then prices should come down fairly quickly, Parsons said. If damage is severe, there are various options that can ensure adequate supply, such as getting product from the nation’s Strategic Oil Reserve and asking nearby oil producers to increase output.

“We are urging motorists to eliminate unnecessary trips this weekend, use the family car that gets the best gasoline mileage and wait to see what damage Ike actually inflicts,” Parsons said.