Storm surge: Ike sends local pump prices soaring
Posted September 12, 2008
Raleigh, N.C. — Gov. Mike Easley on Friday implemented the state's price-gouging law as gas prices jumped amid fears that Hurricane Ike would cripple U.S. refining capacity.
Refineries along the Texas Gulf Coast, which handle about one-fourth of the U.S. daily demand, were shutting down operations Thursday and Friday in advance of Ike, which was expected to hit the coast early Saturday.
The storm sent many Triangle area drivers into a panic, and the rush to fill up gas tanks created long lines at several stations.
“The prices are ridiculous. No one can afford them. The lines are out in the street. I did a u-turn just to get gas,” motorist Shatona Smith said while trying to fuel up on Western Boulevard.
"I filled up because people are saying gas is going to be $5 dollars (a gallon). It's ridiculous," said Barry Richberg, one of a number of customers who waited Friday morning in line on Capital Boulevard to get into a Hess station north of downtown that was selling gas for $3.51 a gallon.
A short time later, the station's price jumped to $3.68 a gallon. The manager said the price increased to remain competitive with nearby stations.
"That's not what they paid for it. It just seems to me they shouldn't raise (the price) until they have to pay for it," driver Candace Cooper said.
"The gas we're getting is the same they had (Thursday). I guess it's an issue of supply and demand," driver David Greenlee said. "Everyone was telling everybody to fill up their tank before the weekend."
More than 65 cars lined up for the pumps outside a Wal-Mart in Wake Forest Friday afternoon.
Cars were cutting in and out of lanes on South Saunders Street in Raleigh, where a BP was selling gas for $3.51 a gallon and a nearby Crown station was selling it for $4.79. At one point, the gas lines backed traffic onto Interstate 40.
"(It's been) 30 minutes or more. We've been waiting so long my baby almost peed in the car," driver Tashia Brown said.
"I went across town and came back, and now I'm stuck in the middle of this," driver Barry Carter said.
The BP ran out of gas late Friday afternoon, which helped quiet the frenzy – until a tanker arrived to replenish the pumps.
The Sheetz station along U.S. 64 East near Knightsdale created a stir when a mistake caused the sign to read $9.99 for regular gas. Sheetz spokeswoman Monica Jones said the station had run out of fuel and instead of changing the price to read all zeros, the manager hit all ‘9’s instead. The price was changed to $3.79 when the station got a new shipment of fuel, she said.
The Pantry convenience store chain, which is based in Sanford and operates the Kangaroo and Petro Express stations, on Thursday, ordered its 1,600 stations in 11 Southeastern states to limit gas sales to 10 gallons.
Although the average price for gas in the Triangle was listed at $3.69 a gallon Friday – a penny higher than the national average – many drivers were stunned by the prices they found at some stations.
In Fayetteville regular gas was being sold for $5.49 per gallon at the Circle B on McPherson Church and Morganton Roads. Hours later the price dropped to $3.99.
The price of a gallon of regular gas shot from $3.79 to $4.39 overnight at a Texaco station on Arendell Avenue in Zebulon. The station manager didn't provide a reason for the sudden increase, except to note that he would have to pay $5.32 a gallon for his next shipment.
Attorney General Roy Cooper said Friday that such jumps need to be investigated as possible price gouging.
“People are understandably frustrated that already high gas prices are rising so quickly," Cooper said in a statement. "I encourage gas stations to avoid panic price increases and consumers to avoid panic fill-ups."
Gary Harris, executive director of the North Carolina Petroleum Marketers Association, said gas prices will go up as major oil companies raise rates on retailers and the higher prices are passed on to customers. Anything more than that pass-through is considered gouging, he said.
"(The retailer) cannot have a profit margin larger than any profit margin in the last six weeks," Harris said.
Under North Carolina law, the governor must make a disaster or emergency declaration or proclaim an abnormal market disruption for critical goods and services for the state Attorney General's Office to investigate and prosecute allegations of price gouging. The law applies to all levels of the supply chain, from manufacturers and distributors to retailers.
“As a result of Hurricanes Gustav and Ike, oil refineries in Texas and Louisiana have temporarily interrupted some gasoline supplies to the pipelines that serve North Carolina. Therefore, there may be temporary limitations on our gas supply," Easley said in a statement. "Wholesale gas prices are up less than 20 cents a gallon over the last few days. Therefore, consumers should not see prices rise substantially more than this rise in the wholesale price."
To report a price gouging incident, people must contact the Attorney General’s Consumer Protection Division.
Easley also asked drivers to conserve as much gas as possible in the coming days.
"We know that there will be some supply disruption, but we do not yet know the extent. Past events of this kind have lasted only a short time," he said.
AAA Carolinas officials are telling people that now is not the time for panic gas fill ups.
“We’re encouraging people to be conservative, combine your trips this weekend, not waste your gas,” said Charlene Edwards, of AAA Carolinas.
Harris said there's a very small chance that local pumps could run dry if excessive power outages in the Houston area keep pipelines offline for several days after the storm.
"While the storm's down there, there really aren't going to be a lot of people trying to run a generator so we can have gas," he said.
Durham City Manager Tom Bonfield said officials were drawing up plans Friday to conserve fuel in case supplies were disrupted.
All vehicles involved in non-essential functions were parked immediately, and fuel could eventually be restricted to police cars, fire trucks and garbage trucks if supplies start to dwindle, he said.