Ike’s impact being seen at gas pumps
Published 5:00 am Friday, September 12, 2008
Gas prices are increasing around Brookhaven as Hurricane Ikebears down on the oil-producing Texas coastline, complicating analready fragile fuel supply chain still attempting to recover fromHurricane Gustav last week.
The storm has yet to make landfall, but its potential effect onTexas refineries is already being felt in Southwest Mississippi.B-Kwik Food Mart on Highway 51 began limiting its customers to $50gasoline purchases early Friday morning. Fuel costs at somestations – particularly independent stations – have jumped as muchas 50 cents over the last two days.
Tillotson’s Economy Service owner Ted Evans said he and manyother gas stations in the area are still on allocation – limitedpurchasing by the tank for fuel trucks at distribution terminals -after Gustav.
Allocation was implemented because the main fuel supply linefrom Baton Rogue, La. to Collins is still being repaired and theheavy traffic at the Collins distribution center has beendispersed, Evans said. He said many area stations are now beingsupplied from a distribution point in Kenner, La. – more than 130miles away.
“They’re having trouble keeping gas in Collins at those holdingtanks,” Evans said. “We’ve got gas right now, but I don’t now howlong it will last.”
The extra tanker traffic at the Kenner distribution point ismaking the resupply process much slower, said Mike Becker, owner ofBrookhaven’s Cracker Barrel gas stations.
“We were supposed to have a couple of tankers down there aboutone o’clock this morning, but I don’t know how long the lines aregoing to be or when they’re getting back,” he said today. “To get aload and get back takes about 24 hours – that’s about as good asyou’re going to do.”
Ron Craddock, chief executive officer of McComb’s Craddock OilCompany, which supplies the Blue Sky and three Exxon stations inBrookhaven, said the cost for filling up an 8,700-gallon fueltanker increased $12,000 between Thursday and Friday.
Craddock said the supply crunch is causing unbranded fuel -gasoline sold independently by stores without major supplycontracts, like Murphy’s and Blue Sky – to jump in price. Brandedfuel suppliers have 24-hour contracts that keep gas stablethroughout the day, he said.
“You’ve got price spikes like I have never seen before,” hesaid. “Some as much as 50 cents overnight. Private brands get outof sight.”
Craddock said major oil companies – though not too popular withthe general public – actually work against hurricanes and holdgasoline prices down during supply crunches. Motorists who normallybuy cheaper gas at unbranded fuel suppliers begin to pass them bywhen their prices go up, sometimes as many as three times perday.
But even that switch can work against supply.
“People will flee from buying the cheap gas to buying thebranded gas and all of a sudden you’ll have a run on Exxon, Shell,Mobile and other branded gasoline,” Craddock said. “That’s whyyou’ll have companies put a cap on how much each person can buy. Ifthey don’t, the lines will get long and they’ll run out ofgas.”
If hurricane damage in Texas forces the major Houston-basedrefineries to close down for an extended period of time, Craddocksaid terminal allocation would increase and purchasing caps at gasstations would become more common.
“We’ll have a situation where it’s difficult to get product,” hesaid. “We’ve never been there – we’ve always managed to find fuelsomewhere, even if we have to travel longer distances to getit.”
Craddock said people should remember that the shortage is mostlikely temporary. Hurricane Ike will eventually pass on and theBaton Rogue supply lines will be back up to speed.
“On the good side, this could end as quick as it began,” hesaid. “If they decide everything is going to be all right, theprices could drop again as fast as they went up.”
Brookhaven-Lincoln County Airport Manager Clifford Britt sharesthe same outlook as Craddock. He kept his spirits up, even as hejoined other Brookhavenites Friday morning to buy gas while thebuying was good.
“I don’t really know what’s going on, but we’ve gone throughthis in times past, then suddenly there wasn’t a crunch anymore,”Britt said. “So, hopefully this will pass, too.”