Real Talk: Hurricane Harvey & Gas Prices

What’s the story?

Gulf Coast hurricanes have historically affected gas prices across the country because so much of the country’s oil refining happens there. The size of the spike and the duration are not likely to be as bad as many might fear, though for those of us living paycheck-to-paycheck even short term price hikes aren’t easy.

What is most likely?

Ten refineries have shut down on the Texas Gulf Coast, sending gas futures spiking temporarily, which translates to spikes at the pump. Currently they’re as high as they’ve been since July of 2015.

CNN Money reports that following Hurricanes Katrina, Rita, Ike and Isaac gasoline prices peaked within two weeks after landfall at a level of 20 cents to 80 cents per gallon higher than previous. Prices returned to prior levels within 2 - 4 weeks.

"Rick Joswick, managing director of global oil at PIRA Energy, predicted prices will "spike" by a similar amount this time. However, he cautioned that the decline to normal levels may take longer.”

Vox spoke to Patrick DeHaan, a senior petroleum analyst at GasBuddy, a firm that monitors gasoline pricing. He noted that currently we have about 15-16 percent of U.S. refining capacity offline. He offered a more regionally nuanced idea of the effects on pricing.

"DeHaan estimates that in the next two weeks, gasoline prices could increase between 20 and 35 cents percent per gallon in the Gulf Coast region, between 10 and 25 cents per gallon in the Midwest, and between 5 and 15 cents per gallon on the East and West Coasts.”

DeHaan agreed that once prices reach peak they should return to normal in 2 - 4 weeks.

What do you think?

What will gas price hikes mean for you? Tell us in the comments where you are and what you’re expecting!

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— Asha Sanaker

(Photo Credit: Pixabay / Creative Commons)