Gas Supplies Tight; Bush Asks Drivers to
Conserve
Washington Post
By Sara Kehaulani Goo and Justin Blum
Washington Post Staff Writers
Friday, September 2, 2005; A01
Motorists gearing up to hit the road for the Labor Day weekend are already
confronting gasoline shortages, closed stations and prices rising daily across
the nation, and relief is expected to come slowly.
After meeting with Federal Reserve Chairman Alan Greenspan, President Bush
said Hurricane Katrina had severely disrupted U.S. energy supplies and asked
consumers to conserve fuel in the coming days. "Americans should be prudent in
their use of energy during the course of the next few weeks," he said. "Don't
buy gas if you don't need it."
Some oil companies, including Chevron Corp., have begun rationing the amount
of gas they sell to suppliers.
Several stations in the Washington area ran dry yesterday, and shortages hit
even harder elsewhere. Some local customers said rising prices prompted them to
top off their tanks, contributing to the area's diminishing gas supplies.
In West Virginia, stations ran out of gas overnight, only to be saved by a
new supply of fuel arriving by truck before the morning rush hour. Customers in
the mountains of North Carolina could buy only premium gasoline because regular
had sold out. Confused drivers in Georgia saw prices that had climbed as high
as $5 a gallon suddenly drop back to $3 in the span of 24 hours.
Kassandra Bremont, comptroller of a group that owns 17 gas stations in
Maryland, was trying yesterday to track the whereabouts of a tanker truck that
was supposed to deliver gas that morning. As of yesterday afternoon, three of
the BP stations her group owns had no gas, and a few more were about to run
out. The 30 nozzles at the station in Catonsville were covered in plastic.
Bremont kept a cell phone in hand and occasionally checked BP's internal Web
site for updates.
"We're trying to decide whether to close down the station," which operates
from 6 a.m. to midnight on a normal day, Bremont said. "If we don't get gas
soon, there's no point in paying someone $8 an hour to do nothing but talk to
customers" or sell the occasional cigarette pack from the station's
mini-mart.
Consumers angered over soaring gas prices made 5,800 calls yesterday to the
Energy Department's price-gouging hotline. Motorists' ire was evident in an
AP-Ipsos poll released yesterday showing that Americans want Bush and Congress
to make the high fuel prices a top domestic priority. The gas crunch is
rippling through the economy and raising policy issues for the White House.
Some airlines, already struggling to survive, are facing ever-higher jet fuel
costs.
Gas prices in the Washington area varied yesterday from as low as $1.08 in
rural Maryland to $3.50 in some parts of Bethesda. The average price of gas for
the Washington area rose 5 cents, to $2.73, yesterday from $2.68 on
Wednesday.
"The jump was only a nickel, strangely enough," said John B. Townsend II,
spokesman for AAA Mid-Atlantic. "But when you drive around, you see a totally
different story. The prices are changing so rapidly it's almost hard to keep up
with it."
Two major pipelines disrupted by Hurricane Katrina that provide much of the
Washington area's gasoline showed signs of life yesterday, although it could be
days before they are running up to full capacity. Colonial Pipeline Co. said
that it was operating at 40 percent of capacity and that it hoped to operate at
61 percent by today and 86 percent by the middle of next week. Officials with
the other pipeline, Plantation Pipe Line Co., said the line is operating at 25
percent.
Floodwaters and mandatory evacuation orders have prevented some oil firms
from assessing damage to their refineries, and other logistical problems have
limited their ability to inspect offshore oil platforms.
But oil analysts and company officials said they expected an increase in
imports of gasoline from Europe within two weeks. That could help to bring down
prices and ease supply disruptions, they said.
Before the hurricane, U.S. refiners could turn 17 million barrels of oil a
day into gasoline and other products. The storm has reduced that capacity by
1.8 million barrels a day, or nearly 11 percent, according to the American
Petroleum Institute, an industry trade group. Some other refineries, which were
not damaged by the storm, are operating below capacity because of limited crude
oil supplies.
Eight U.S. refineries that turn crude oil into gasoline were offline because
of storm damage, the Energy Department said yesterday. Two other refineries
that produce petrochemicals were out of service.
Oil companies are struggling to produce and deliver gasoline to stations.
"It's an issue of getting fuel to the right place at the right time," said
Scott Dean, a spokesman for BP PLC. "There has been this rippling effect from
the storm. It's going to take a while for these ripples to flatten out."
Some refiners have been scrambling to get crude oil because of disruptions
to production in the Gulf of Mexico. Output has slid by some 90 percent in the
Gulf, amounting to a loss of about 1.4 million barrels a day, according to the
Minerals Management Service.
The Energy Department yesterday approved three loans of crude oil from the
700 million-barrel Strategic Petroleum Reserve. The department agreed to
provide 6 million barrels of oil to Exxon Mobil Corp., 1 million barrels to
Placid Refining Co. and 1.5 million barrels to Valero Energy Corp. Also
yesterday, the Bush administration relaxed federal rules to allow foreign oil
tankers to transport oil from one U.S. port to another. Industry officials said
that would help move supplies to areas that need them.
The Bush administration has also relaxed environmental regulations requiring
some areas to use special summertime gasoline blends designed to reduce
pollution. Oil industry officials said relaxing that rule allowed supplies to
be sent to Atlanta yesterday, relieving rapidly rising prices.
In Alexandria, Ali Rana, the gas station manager at Olde Town Car Care
Shell, said he could run out of gas by the end of the month. He was informed by
his supplier that he would receive enough to sell only 1,700 gallons per day,
and he usually sells about 2,200. "If we're out of gas, we cannot get any
more," he said, adding that he plans to "hope and pray and see what
happens."
Cars were lined up three-deep at all 10 pumps at a BP station on Route 28 in
Centreville yesterday, and cashier Singh Darshan said the station had to shut
down twice since Wednesday night because gas shipments were late. Regular
customers said that the station tended to be crowded because the prices are
usually relatively low -- $2.81, $2.91 and $2.99 yesterday -- but that they
never see lines.
The station closed all its pumps from 11:30 p.m. Wednesday until 2 a.m.
yesterday and then half of its pumps for two hours yesterday afternoon. In both
cases, the supply trucks were late.
Darshan said gas prices had not changed between Wednesday and Thursday but
had gone up 20 cents between Monday and Tuesday and 7 cents between Tuesday and
Wednesday.
At the Shell station on Georgia Avenue and Upsher Street NW, customer
Charlene Evans said she was surprised by what she found: A handwritten note on
every pump indicated that the station was out of regular and super grades,
leaving only the most expensive premium grade. But Evans said she was able to
fill up with the midgrade super for $2.89 a gallon. Other customers reported
being able to fill up their cars with regular gasoline, as well.
The franchise's manager, Redi Hassan, explained that there had been problems
with "air pockets" in the regular and super grades and that he believed that
only premium gasoline -- which by the end of the day was selling at $3.25 a
gallon -- would be guaranteed.
At the Leesburg Amoco BP, Mary Ellen Huffman had gotten calls three times
the previous day from the manager, each time with the same message: Raise the
prices. Yesterday afternoon, the green and yellow sign outside the store read
regular for $3.14 a gallon, up from $2.43 the previous morning, and that spike
had made customers "real angry," said Huffman, an assistant manager.
"They say they're going to have to ride bicycles," she said, nodding her
head as she stood behind the store counter. "My advice? Get it now."
Harry Chang put up the "Sold Out" signs at his Chesterbrook Excel station on
Old Dominion Drive in McLean, but not because of a break in the supply chain
from the hurricane. Chang, an independent dealer, ran out of gas Tuesday
morning. He said that he could still buy gas to sell but that he didn't want to
buy it at the post-Katrina prices. He said the lowest distributor price he knew
about was $2.97, and when he added on federal and state taxes plus credit card
fees and a 3-cent profit, he estimated that he would have to charge $3.47 a
gallon.
That would make Chesterbrook Excel one of the most expensive gas stations in
the area. Chang said his station prides itself on being usually one of the
cheapest. If he charged $3.47, "nobody would come," said Jose Rivera, who works
at the station.
"Selling at a high price would ruin my reputation," said Chang. "I'll wait
until it goes down. People say I'm crazy."
Staff writers Karin Brulliard, Kirsten Downey, Lila de Tantillo, Michelle
Boorstein, Dina ElBoghdady, Jonathan Abel, Michael Rosenwald, Elissa Silverman
and Ann Marchand of washingtonpost.com contributed to this report.
© 2005 The Washington Post Company
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