Gas prices could jump this week after hack and amid truck driver shortages
A cybersecurity attack on a major U.S. gas pipeline could disrupt the East Coast’s gasoline supply and jack up pump prices.
The Colonial Pipeline, the artery which runs from Texas to New York and is responsible for delivering about 45% of all fuel to the East Coast, said it fell victim to a hacking attack over the weekend. The company has halted delivery and has yet to announce a date when its mainline will be fully operational.
“This shutdown will have implications on both gasoline supply and prices, but the impact will vary regionally. Areas including Mississippi, Tennessee, and the east coast from Georgia into Delaware are most likely to experience limited fuel availability and price increases, as early as this week,” said Jeanette McGee, AAA spokesperson, in a press release. “These states may see prices increase three to seven cents this week.”
Until the East Coast’s fuel supply is fully operational again, states may need to rely on gasoline from other pipelines and foreign imports to supplement supply. That’s still not an overnight fix for the disruption because it takes about 15 to 18 days for fuel to flow from Texas to New York, according to AAA.
Gas pumps in Southeastern states, especially Georgia, Tennessee, South Carolina, North Carolina, Virginia, Mississippi and Alabama, will be hit hardest, according to a GasBuddy forecast. Industry experts at GasBuddy predict an increase of a “few cents per gallon,” but the price is predicated on how long the pipeline is out of commission.
As of Monday, the AAA national gas average was $2.967, which is more than ten cents higher than a month ago and a dollar higher compared with May 2020 when government-imposed COVID-19 shutdowns blunted demand. The price, though, is $1.14 less than the highest recorded national average of $4.114 in July 2008.
The latest setback adds to challenges the fuel industry is already facing, including a lack of qualified drivers to transport the nation’s gas supply.
The pandemic’s effect on the nation’s economy and workforce caused a wave of early retirements for truck drivers, especially those with hazmat certification, and disrupted the pipeline of workers, CNN reported earlier.
“Last year, there was a 40% drop in commercial driver license training classes and according to some in the trucking industry, 20% of schools are still closed,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Money.
The truck driver shortage and now pipeline disruption comes as motorists get ready to embark on summer road trips. Over 12 months spent with immediate family members has led to pent-up demand to explore and reconnect with loved ones across the country.
But there’s no need for pandemic-weary Americans to stockpile gasoline like they did for toilet paper and hand sanitizer last spring, De Hann said. In fact, hoarding or panic buying only prolong outages and price spikes.
“It's been a challenge in some areas of the country where gasoline demand was especially brisk (spring break destinations, etc.) for stations to stay ahead of the demand with fewer truckers,” De Haan said. But “I don't believe the majority of Americans will have any problems finding gasoline this summer.”
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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