Consumers enraged by gas price spike

09/13/2008 12:00 AM

09/14/2008 6:47 AM

Cries of price-gouging echoed throughout Charlotte Saturday as residents wrestled with rapidly increasing gas prices and dozens of closed gas stations.

When Hurricane Ike struck the Gulf Coast, it shut down 14 oil refineries.

The effects of that shutdown are being felt nationally as a fuel shortage leads to spikes in prices and runs on gasoline from Tennessee to New York.

It is still unclear how many Charlotte-area stations are out of gas. Nearby Lincoln County reported 14 of 32 stations out. As of 11 a.m. Saturday, Charlotte officials reported 56 stations were out of gas, a number considerably higher than the 20 reported in 2005 after Hurricane Katrina.

The news from South Carolina is even worse. Half of the 26 Midlands stations visited by The State newspaper on Saturday were either out of fuel or out of one or more grades of gas. Station operators were unsure when their next shipments would be delivered.

The impending gas shortage forced N.C. Gov. Mike Easley and S.C. Attorney General Henry McMaster this week to activate anti-gouging provisions. The laws prohibit companies from charging unreasonably high prices.

McMaster's office received more than 200 calls Friday. The N.C. attorney general received more than 400.

According to AAA, gas prices in the Charlotte region averaged $3.70 on Thursday. That was up to $3.91 early Friday, and climbed fast until by midday Saturday prices reached upwards of $4.50 a gallon. Officials said it could be weeks before gas prices return to pre-storm levels.

On Saturday, several people contacted the Observer, complaining of what they felt were excessively high gas prices.

Jeannie Daleure said that prices reached $5.29 along U.S. 74 near Indian Trail.

“This is getting out of control,” she wrote in an e-mail.

Anthony Arellano watched Friday as one gas station in Harrisburg jumped from $3.68 to $4.19 to $4.39.

“These people are crooks,” Arellano wrote.

Jonathan Barth grew so angry with the prices he actually stood outside one gas station on Johnston Road holding a sign that read “Stop Driving Up Prices.” Barth said he was convinced the station was involved in price-gouging.

“These people capitalized on the panic and it was wrong,” he said.

However, industry experts said store owners are forced to respond to the market. When wholesale gas prices increase, they must charge more. And in cases, such as now, they increase rates in anticipation of higher wholesale prices.

“It's in their best interest to keep prices low,” said Carol Gifford, AAA Carolinas spokesperson. “They want to get their customers back as soon as they can.”

Ike, coming two weeks after Hurricane Gustav, struck the Texas coast, a region thick with oil refineries.

Just six of the 34 Gulf Coast refineries in the paths of Ike and Gustav were running at full strength Saturday, the U.S. Department of Energy reported.

The storm shut down 14 Texas refineries with a total capacity of 3.8 million barrels of crude a day. The average cost for a gallon of gas nationwide could head back toward all-time highs of $4-per-gallon, reached over the summer when oil prices neared $150 a barrel.

Refineries could remain closed for days, even with no serious wind damage or flooding. Workers go though extensive procedures to restart the massive complexes. The last refinery shut down by Gustav had restarted only Thursday.

Charlotte receives the bulk of its fuel from two pipelines running up from the Gulf Coast: the Colonial Pipeline and the Plantation Pipeline.

Plantation, according to a spokesman, is still running but is operating at reduced volumes. The Colonial, the nation's largest pipeline, has shut the main gasoline line running north.

While this has hurt N.C., it has nearly crippled the Palmetto State. The Colonial is South Carolina's main line. A spokesman for the Colonial Pipeline said fuel could start moving again as early as today.

The bottom line is that as long as the gas supply remains low, gas prices in the area will be high. And officials said it would take days to figure out where everything stood. After that, it could be a week or more before prices start to drop.

“It really depends on what they are dealing with,” Gifford said. “It's just too early to say for sure.”

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