Gas prices hit another record
While some predicted gasoline prices would reach $4 per gallon or higher nationwide and rumors of looming rationing abounded in the days following damage to oil and gas production from Hurricane Katrina, average prices nationwide and throughout Delaware have remained closer to $3 per gallon.
However, that hasn’t meant this summer’s trend of record high prices has abated. Indeed, Delaware’s average price for a gallon of regular unleaded has now eclipsed the national average, coming it at a new record high of $3.23 as of Sept. 7, while the national number lagged behind at just $3.04, according to AAA Mid-Atlantic.
In just the last week, Delaware’s average price has increased a whopping 62 cents per gallon, up from a comparatively meager $2.62 per gallon — a price that itself might have seemed painfully high just a few months ago. The statewide average has jumped 87 cents per gallon in the last month alone.
The predictions of gas price increases arrived even before the hurricane made its second landfall on the Gulf Coast, with heavy impact anticipated on oil production from platforms in the Gulf of Mexico.
But, in addition to the devastation the storm wreaked in New Orleans and along the coast, it cut power to refineries in that area and damaged transport via pipelines from region to the Northeast. Some pipelines returned to full capacity within 24 hours of the hurricane’s landfall, while others resumed limited operation in the following days.
Still, prices have trended upward in most areas of the country and continue to do so in Delaware, which ranks toward the high end of states for average gas prices. The District of Columbia tops that list this week, at $3.38 per gallon, with New York and Maryland right behind at $3.34 and $3.26 respectively.
Interestingly, prices in the storm-ravaged states of Louisiana and Mississippi were at the bottom of the AAA ranking, coming in at $2.75 and $2.73, respectively, while Alaska filled out the list of three lowest-priced states at $2.74.
Prices are some stations around the nation were recorded at $5 per gallon or higher, bringing questions of price gouging in the wake of the storm and the concerns over the Gulf oil supply and refinery damage.
Congressmen, back in Washington this week, noted high profits anticipated by oil companies for the fiscal quarter and increases in consumer prices that well exceeded wholesale price increases, questioning whether profit was being made at the expense of the consumer and on the excuse of the hurricane.
Also of note is a customary seasonal upward trend in gas prices. Traditionally, gas prices increase over a holiday weekend — particularly Labor Day, with its last-hurrah-of-summer aspect. But those hoping gas prices might begin to fall after the Labor Day holiday were instead faced with paying upwards of $50 to fill up even a modestly-sized gas tank mid-week.
However, there is hope.
“It is difficult to predict when prices will stabilize in our area, but given that a number of refineries have restarted, we are hopeful that we have seen the worst of the gas prices,” said Catherine L. Rossi of AAA Mid-Atlantic, speaking to the potential for further increases.
The future isn’t quite as rosy as it could be, though.
“Many industry analysts agree that we won’t begin seeing any significant decreases at the pump until the Gulf Coast oil production recovers more fully. We expect it could be several weeks before Gulf refineries are back up,” Rossi added.
The tremendous price increases in the last week have mirrored the historical proportions of the hurricane’s other impacts.
“Since AAA began tracking gas prices in 1974, this is the highest jump ever recorded for one week,” noted Rossi. “Current gas prices have surpassed the highest prices ever recorded by AAA. Before this week, the inflation-adjusted average price of gas peaked during the 1979-1980 energy crisis. The events of this past week have changed the course of energy history.”
Despite widespread concerns about the supply of gas and the possibility of rationing, Rossi said local supplies of gas have been relatively stable in the region. Only scattered outages have been reported, mostly at independent gas stations, according to Rossi. None were reported in the immediate vicinity of Delaware’s resort towns.
Still, Rossi offered advice to motorists in light of the prices and supply issues, emphasizing the impact of individual drivers on the larger picture.
“We encourage drivers to conserve gasoline when possible,” she said. “Drive fuel-efficient vehicles, combine errands and slow down to save fuel. These simple steps can go a long way ease the overall demand for gas.”