AASHTO Journal

Fuel Prices Still Rising After Harvey

U.S. motor fuel prices continued to spike this month in the wake of Hurricane Harvey's shutdown of one of the nation's main fuel refining and distribution centers, even as some of that storm-closed refining capacity was coming back online.

The U.S. Energy Information Administration said average retail gasoline prices across the country reached $2.68 a gallon on Sept. 4, up 28 cents from a week earlier and nearly 46 higher than at the same point in 2016.

"The East Coast, Texas and parts of the Gulf Coast were the hardest hit by rising gasoline prices in the wake of Hurricane Harvey," the agency said. "Texas and Florida, in particular, saw increases of 40 cents/gal. Gasoline prices in Houston, Miami, New York City, and Boston were up at least 35 cents/gal."

dollarpump.jpgThe average pump price of diesel fuel, which is mainly used by heavy trucks carrying freight shipments, rose less sharply but still increased 15 cents a gallon for the week to nearly $2.76 cents by Sept. 4, the EIA said. That was up from 35 cents a year earlier.

The trucking industry can largely pass along higher fuel costs in freight surcharges, but sharp hikes in fuel prices for passenger cars often tamp down – at least temporarily – discretionary roadway travel. If sustained, that can sometimes push drivers to seek alternatives such as carpooling and public transit options.

Any decline in motor fuel consumption due to higher prices would also crimp the flow of excise tax receipts that help feed the federal Highway Trust Fund, as well as the fuel use-based transportation revenue streams of most states.

While U.S. fuel supplies should rebuild and stabilize once all the refineries and pipelines are back up – and therefore bring prices back down in coming weeks – other shocks could extend the period of higher pump prices.

For instance, even as the Texas Gulf coast begins recovering from Harvey and ships again move in and out of the Houston Ship Channel, fast-forming Hurricane Irma threatened to hit the country from the Atlantic Ocean.

Irma reportedly left at least 19 dead after hitting Caribbean islands with sustained winds of 180 mph, and was on a forecasted path to move northward up the Florida peninsula and along the Eastern Seaboard.

Meanwhile, fuel prices appeared as though they would keep rising a while. The AAA motor club, which surveys fueling stations daily and reports prices that differ somewhat from the EAI's weekly report, showed as of Sept. 7 that the national average gas price was still moving higher each day.

Questions regarding this article may be directed to editor@aashtojournal.org.

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