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Ike Brings Fear Of Increased Gas Prices

Gas Up Less Than 1 Cent Friday

Friday, September 12, 2008 – updated: 12:43 pm EDT September 12, 2008

Hurricane Ike is on a path straight toward the nation's biggest complex of refineries and petrochemical plants, and that's raising worries about gasoline supplies.

One convenience store chain is asking customers in 11 states to limit purchases to 10 gallons. The Pantry doesn't have any supply problems yet, but it says it's trying "to head off any panic buying." A spokeswoman said the limit is voluntary and customers have been receptive.

The Pantry owns 1,600 stores, mostly in the Southeast.

Emergency officials in North Carolina said people lined up at stations last night after rumors spread of supply problems. They said there was no shortage, though some stations did run out of fuel.

Gasoline prices spiked in many areas Thursday, with prices pushing back above $4 a gallon in some locations.

Exxon Mobil, Valero Energy, ConocoPhillips and Marathon Oil are among the companies that have stopped refinery operations on the Texas coast. As of Thursday, about 97 percent of crude production and 93 percent of natural gas production in the Gulf were shuttered, according to the Department of the Interior's Minerals Management Service.

Jason Toews of Gasbuddy.com said that the "notorious" impact that Hurricane Katrina had on gas prices in the United States could be seen again.

"The Gulf of Mexico area has a large percentage of oil production and refining," Toews said. "When Katrina hit, it knocked out 8 percent of the refining capacity. For supplies of retail gas to go down by 8 percent is a huge shock to the system."

Hurricane Katrina caused an almost 50 cent jump in gas prices over a five-day period of time: from $2.589 per gallon of regular gas right before Labor Day to a peak of $3.068 on Sept. 3.

"Over the course of three or four days, that [type of hike] was unheard of at the time," Toews said. "I don't think we've seen anything like that since. Gas has been high this summer, but it was more of a gradual increase."

Prices for regular unleaded gas on Friday, according to AAA, rose less than a penny to $3.675 per gallon. Oil prices are up slightly on Friday but are still close to falling below $100 per barrel for the first time since April.

There are more than 4,000 oil and gas installations in the Gulf. In 2005, Hurricanes Katrina and Rita destroyed 109 oil platforms and five drilling rigs.

Toews said that it takes time for crude oil to go from the ground to the refinery to gas stations -- three months if it comes from the Middle East, less if it comes from Texas.

"More often than not, if crude oil prices are going up, oil companies will pre-emptively raise gas prices to slow demand," Toews said. "Oil companies don't like to scare off consumers. If they can ease people into price hikes, consumers are less likely to change their habits."

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