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National average for gasoline tops $3 a gallon amid pipeline shutdown, rush to buy in Southeast

A driver leaves BJ’s station looking for gas, after a cyberattack crippled the biggest fuel pipeline in the country, run by Colonial Pipeline, in Norfolk, Virginia, May 11, 2021.

Jay Paul | Reuters

The national average for a gallon of gas jumped above $3 on Wednesday for the first time since 2014, as much of the crucial Colonial Pipeline remains offline.

Amid fears of a supply shortage, consumers in Southeastern states are heading to the pump, creating long lines and in some cases wiping fuel stations dry.

On average, Americans are now paying $3.008 for a gallon of gas, up from $2.985 on Tuesday and $2.927 one week ago.

In some Southeastern states, the jump in prices is much larger. Georgians are now paying $2.951 per gallon, up from $2.715 one week ago. In North Carolina the average now sits at $2.850, compared with $2.689 a week ago. In Virginia, meanwhile, prices have jumped from $2.741 to $2.871.

Spot shortages across the most impacted states are rising. According to the latest data from GasBuddy, 15.4% of Georgia fuel stations are out of supplies, while almost 60% of stations in the metro Atlanta area are empty.

In North Carolina and South Carolina, 24.8% and 13.4% of stations are empty, respectively. In Virginia, 15% of stations are without fuel.

Patrick De Haan, head of petroleum analysis at GasBuddy, noted that there are only small outages at the rack level, meaning while there might be enough fuel, there aren’t enough truck drivers to transport it.

“It’s been a tough couple of days here,” David Alexander, president of J.T. Alexander & Son, a North Carolina gas distributor, said on CNBC’s “Worldwide Exchange.”

On Wednesday morning, he said, about 40% of his locations were out of fuel following a “crazy wipeout” by people who were lined up all day long. On Tuesday morning, just one of his locations was dry.

“We have to get that thing flowing in the next day or two, or we will be in a mess,” he said.

Florida, Georgia, Virginia and North Carolina have declared states of emergency. In an effort to ease supply constraints, the Department of Transportation waived some restrictions around fuel transport by truck. Additionally, amid the jump in fuel prices, Georgia has temporarily suspended its gas tax.

Alexander said supply levels were fine until people began getting nervous and headed to the pump.

“The pipeline has been shut down since Friday. We were going through the weekend and everything was fine,” he said. “Panic just creates so much demand we can’t keep up with it.”

‘Massive undertaking’

Not without options

The pipeline was the target of a ransomware attack last week. Should it remain offline for an extended period, there are other ways to move fuel along the Eastern Seaboard.

Refined gasoline can be imported from Europe, and the Jones Act could also be waived. Officials said Tuesday that there have been no calls to waive the act, which requires goods transported between U.S. ports be on U.S.-flagged ships.

Rail and truck deliveries are potential other options.

In the meantime, officials stressed that consumers should fill their tanks only when necessary.

“Much as there was no cause for, say, hoarding toilet paper at the beginning of the pandemic, there should be no cause for hoarding gasoline especially in light of the fact that the pipeline should be substantially operational by the end of this week and over the weekend,” Granholm said Tuesday.

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