Refinery output blamed for higher prices at pump

Published 12:00 am Saturday, January 5, 2013

By Kimberly Hopson
L’Observateur

LAPLACE – The new year has also brought a rise in gas prices for Louisiana residents — the average has risen approximately 3.9 cents per gallon in the past week, according to a survey of more than 2,000 gas outlets in the state by price comparison website GasBuddy.com. The state average currently rests at approximately $3.14 per gallon. The national average also increased by 3 cents in the last week to $3.28 per gallon, according to the website.

Prices around the LaPlace area varied depending on the station, but most were lower than the state average.

Most stations were priced at $3.12 per gallon, but the lowest price, $3.03, was found at a Citgo station on Airline Highway. Local Shell stations had the highest price, at $3.21 per gallon.

Gregg Laskoski, a senior petroleum analyst with GasBuddy, attributes the rise to the recent decline in U.S. refinery output. Last week’s numbers showed Gulf Coast refineries operating at 93.8 percent capacity. An increase in crude oil prices also contributed to the hike.

“On Dec. 24, the price of crude was $88.61; yesterday crude closed at $93.12,” said Michael Right, vice president of public affairs for the Automotive Automobile Association earlier this week.

“Prices have risen at the pump following a recent rise in crude oil prices,” said Patrick DeHaan, another senior petroleum analyst at GasBuddy. “Six out of the last seven years we’ve seen gasoline prices rise between Christmas and Jan. 15, so what we’re seeing is something I consider normal.”

“Hurricane Sandy delivered a punishing blow to the East Coast causing refinery shutdowns, flooding and power outages.  The resulting fuel shortage triggered mile-long lines for gas. New York gasoline spiked to a price level exceeding Honolulu and Anchorage as the highest in the U.S.,” said Laskoski.

2012 saw the price of gasoline reach a record high at a whopping $3.60 per gallon, according to data from the American Automobile Association.

“2012 was a year that focused the spotlight on our nation’s oil refineries; it showed us the vulnerability of our infrastructure and what can happen to prices at the pump when infrastructure is compromised. We began the year with a BP refinery fire in Cherry Point, Wash., that caused massive spikes on the west coast. The spring delivered challenges for Great Lakes refineries and pushed Chicago gas prices to a record high. Similarly, the California summer saw major refinery outages there and new record high prices,” said DeHaan.