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Hurricane Harvey: US petrol prices rise as key pipeline shut


Challenges remain for the nation's system of getting gasoline to the pumps of service stations, since Hurricane Harvey forced the shutdown of at least eight Texas refineries.

Colonial Pipeline Co, the biggest USA fuel system, delayed reopening a segment of its system in Texas that was shut due to Hurricane Harvey, increasing worries about rising retail prices and the domestic distribution of gasoline and distillates.

Gasoline prices have been on the rise even before the pipeline shutdown. Running from the Houston area to NY harbor, it includes more than 5,500 miles of pipeline, most of it underground, and provides almost 40 percent of the South's gasoline.

In addition to refinery shut downs, several major pipelines continue to operate at reduced rates, have shut down or plan to shut down due to lack of supply.

AAA Alabama Spokesman Clay Ingram said only a portion of the 5,500-mile pipeline - from Lake Charles, Louisiana, to Texas - is closed.

The shuttering of the Colonial Pipeline, which traverses 13 states, including Virginia and Maryland, could further impact gasoline prices.

Fuel typically costs him about $25 a day at the most, he said, concerned the storm could eat into his profits. Crews will have to inspect the portions of the pipelines in Houston that are underwater to resume operations.

A view of the price board at a Mobil gas station on Monday, Aug. 28, 2017, in Latham, N.Y.

The Colonial Pipeline is the largest system to carry fuel between the Gulf of Mexico and NY.

"Consumers will see a short-term spike in the coming weeks with gas prices likely topping $2.50 per gallon, but quickly dropping by mid to late September", said Jana L. Tidwell, manager of public and government affairs for AAA Mid-Atlantic.

Several East Coast refineries have run out of gasoline for immediate delivery as they sent fuel elsewhere, and concerns over shortages ahead of the U.S. Labor Day extended weekend were mounting. The average for a gallon of regular gasoline rose from roughly $2.35 a week ago to $2.45, AAA reported.

Ingram said he would not be surprised to see gas dip back below the $2-per-gallon mark this fall.

More rain fell on the area in the past 24 hours than any other part of the region since the storm began last week, according to David Roth, meteorologist at the US Weather Prediction Center. Traditionally a high travel time, this year many gas station operators are expecting a shortage of supply through the holiday weekend.

On average, gas prices in the entire state of North Carolina have spiked by about 20 cents since last week.

"They're probably going to have to take a while to inspect all that, otherwise we could look at another catastrophe", driver Scott Davis said.

All of these problems have sent gasoline prices surging. With an eye on the nation's fuel supply, the Department of Energy authorized a release of crude oil from the strategic petroleum reserve in order to help Phillips 66 get its Lake Charles refinery up and running.

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