Gasoline demand skyrockets due to US pipeline hack

Gasoline demand skyrockets due to US pipeline hack

An increasing number of gas stations along the East Coast of the United States are running out of fuel, as eager motorists fill up their tanks following a ransomware attack that shut down the Colonial pipeline, a critical artery for gasoline. Panic buying threatens to exacerbate the impact on supply.

As of 2 p.m. ET Tuesday, 7.6% of gas stations in Virginia and 7.5% in North Carolina were out of gas, according to outage figures reported by GasBuddy, an application that tracks fuel prices and demand. Virginia’s figure was unchanged from 11 a.m., while North Carolina’s rose from 5.8% previously.

There have also been increasing outages at gas stations in Georgia (5.2%), Florida (2.7%) and South Carolina (2.9%), according to GasBuddy, which collects user reports and shares information with the government during emergencies.

“Panic buying” is “drying up the region’s stations,” Patrick De Haan, GasBuddy’s chief oil analyst, told Citizen Free Press Business.

He warned that “irrational behavior” could prolong supply problems “for weeks”.

Energy Secretary Jennifer Granholm called on Americans not to hoard gas as the pipeline does its best to resume operations.

“Let me emphasize that just as there was no reason to, for example, hoard toilet paper at the beginning of the pandemic, there should be no reason to hoard gasoline,” Granholm said during Tuesday’s press conference at the White House, “especially to in light of the fact that the pipeline should be largely operational by the end of this week and over the weekend.”

The demand for information on the availability of gasoline is so intense that even GasBuddy itself has suffered failures. De Haan told Citizen Free Press that the platform is experiencing “slowdowns” due to “extreme traffic,” so users may experience “constant wait times” on its website and app.

The price of gasoline flirts with $3 a gallon

Gasoline demand in the United States soared 20% this Monday compared to the previous week, according to GasBuddy.

According to GasBuddy, demand increased 40.1% in the five states in which Colonial Pipeline operates: Georgia, Florida, South Carolina, North Carolina and Virginia.

“It scared me that I couldn’t go to work or take my daughters to school,” Linderly Bedoya, a Florida resident, told Citizen Free Press on Tuesday. “All the gas stations in my area were out of gasoline and when I finally found one I had to stand in line for an hour and had to fill up the tank with unleaded premium.”

Bedoya posted a photo on Twitter of a gas station sign in Tallahassee warning drivers that only premium fuel is available.

GasBuddy reports smaller outages, affecting less than 1% of gas stations, in Alabama and Tennessee.

The national price of gasoline rose to $ 2,985 on Tuesday, the highest level in nearly six years, according to AAA.

Investors take the shock of supply in stride. Reformulated gasoline (RBOB) futures haven’t changed much from Friday.

Emergency measures to mitigate supply concerns

Virginia Governor Ralph Northam issued a declaration of a state of emergency Tuesday afternoon “to prepare and coordinate our response” to the closure of the Colonial Pipeline. Northam said that while gasoline stocks in Virginia are “sufficient to address immediate supply concerns, it acknowledged that a prolonged shutdown of the pipeline will cause” gasoline supply disruptions to various retailers.

In Georgia, Governor Brian Kemp signed an executive order suspending the state gas tax to help drivers cope with the higher prices caused by the Colonial Pipeline hack. The Kemp decree also allows increasing the weight limits of trucks that transport fuel and prohibits price increases.

Meanwhile, North Carolina Governor Roy Cooper declared a state of emergency Monday night, a move that allowed him to temporarily suspend some fuel regulations in an attempt to ensure adequate supply.

The Environmental Protection Agency (EPA) issued an emergency fuel exemption Tuesday to alleviate shortages caused by the Colonial Pipeline closure. EPA Administrator Michael Regan cited “extreme and unusual fuel supply circumstances” to exempt fuels sold in the District of Columbia, Maryland, Pennsylvania and Virginia from certain federal requirements. The exemption will continue until May 18.

The Colonial pipeline, which supplies nearly half of the diesel and gasoline to the East Coast, said Monday that it expects to be substantially operational by the end of the week after a hack that authorities believe was carried out by a criminal group. called DarkSide.

“This is a hugely important part of our energy infrastructure on the East Coast,” Neil Chatterjee, commissioner of the Federal Energy Regulatory Commission, told Citizen Free Press Business on Monday. “These pipelines are now, in many ways, on the front line of our national defense.”

Alabama Governor Kay Ivey urged residents not to panic and “fill the tank only if necessary, and not fill multiple containers.”

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