Gas Prices To Soar In Coming Weeks
Posted August 8, 2006 6:32 a.m. EDT
RALEIGH, N.C. — Gas prices are expected to jump 15 to 20 cents over the next several weeks, according to
The hike is a direct effect of the nation's single biggest source of domestic crude oil, a 16-mile piece of the Alaskan pipeline, shutting down indefinitely.
Officials said the bulk of fuel in North Carolina comes from the Gulf Coast, not Alaska, so the higher gas prices are expected to hit the West Coast first before moving eastward.
AAA Carolinas said it expects to see an increase of 5 cents to 10 cents per gallon across North Carolina. Mike Walden, an economist at North Carolina State University, said the prices might reach up to $3.20 a gallon. Last year at this time, gas prices averaged $2.25 a gallon.
"Five years ago, this would not have mattered because there was about 2 million gallons a day slack. We don't have that now," Walden said. "We can't go to a country like Saudi Arabia and say, 'Help us out in the short run. Pump oil.' They can't do it either, so we will probably see this translate into higher gas prices."
The news of BP's pipeline shutdown sent the price of light, sweet crude oil up more than $2 a barrel. The average retail price of gasoline also rose.
Most analysts say the wildcard in gas pricing is the weather. If a hurricane were to hit the Gulf Coast this season, gas prices in North Carolina will probably go beyond post-Hurricane Katrina levels when prices approached $3.50.
Problems with Alaska's oil supply were once fairly common. Although the pipeline was built to survive earthquakes, it is vulnerable to sabotage and forest fires.
From 1977 to 1994, there were 30 to 40 spills a year, on average. Between 1997 and 2000, however, oil experts say, less than seven barrels worth of fuel spilled.