Sandy's aftermath is still being felt and its economic impact is still being tallied. Some entire towns remain under water but one thing remains certain; gasoline prices in some parts of the northeast will be going up.
It's not 'price gouging'. Don't blame the retailers. Don't blame politicians. Don't blame Wall Street hedge funds. Don't blame OPEC.
It's all boils down to supply and demand and in the northeast, gasoline supply, unfortunately, has tightened. East Coast refineries had been running at 81.8 percent of capacity (well below the national rate: 87.2 percent) in the week before Sandy reached New Jersey and just before its arrival, refineries in NJ, DE, MD and PA wisely shut down for safety precautions. Unfortunately, gasoline supplies are reportedly at the lowest level since 1990.
With Sandy came extraordinary flooding and widespread power outages. Oil refineries were struck just like millions of homes and businesses in the region and their efforts to resume normal operations began almost immediately.
Nonetheless, several are still recovering. Phillips 66 said it had flooding in low-lying areas of its 238,000 barrels per day (BPD) refinery in Bayway, NJ. That plant is waiting for power to be restored.
Hess Corp.'s 70,0000 BPD refinery in Port Reading, NJ, which Reuters said had shut down pre-emptively before Sandy, also lost power and has no timeline for restarting.
Colonial Pipeline. a conduit that supplies as much as 15 percent of the East Coast's 5.2 million BPD of gasoline, diesel and fuel from Gulf Coast refiners, said it also lost power at its Linden, NJ tank farm. The company is bringing in portable generators to expedite fuel pumping for the region.
Hopefully the region's fuel supply will bounce back quickly but for now, demand exceeds supply. And when that occurs, there's only one direction for retail prices to go.
If you're in the northeast, please don't exacerbate the problem. No need to fill up a car that will remain parked at home.