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Gas prices rise as Isaac heads to coast

Any damage to Gulf rigs and refineries could continue price hike

POSTED: August 27, 2012 11:34 p.m.

The threat of Tropical Storm Isaac to the Gulf Coast has caused an increase in the price of gas at the pump.

“The concern about the storm and what it will deliver has already pushed up wholesale gas prices,” GasBuddy Senior Petroleum Analyst Gregg Laskoski said.

He said wholesale prices are what the retailers pay to purchase gas. This higher rate affects the price motorists pay.

According to a news release from AAA, “The precautionary shutdowns alone are said to have caused a loss of two to three million barrels in Gulf oil production.”

The result has been an increase in the gas prices in some states in the South. According to AAA, there was a 3-cent increase in the price for the national average for regular gas, which was $3.75. Georgia’s gas price went up about 6 cents to an average of $3.70.

Laskoski said the potential for further increases is uncertain as it is not known what kind of damage Tropical Storm Isaac will cause to oil refineries and production in the Gulf of Mexico.

“We really don’t know yet how expensive this storm is going to be,” Laskoski said.

He said electrical outages caused by the storm can also cause gas prices to go up because even if the supply is there, drivers won’t be able to pump it.

The severity of the damage to the oil rigs and refineries will end up determining if gas prices increase or decrease.

“If it has an adverse affect on the oil refineries in the gulf, you’re going to see higher prices at the pump. No question about it, “ Laskoski said.

Besides Tropical Storm Isaac, if other world events occur, such as wars in the Middle East that cause the price of crude oil to go up, Laskoski said that could also cause an increase in gas prices.

“If crude oil prices go up, we could see gas prices go up ...” he said.

Laskoski said motorists still may see an increase in gas prices over the Labor Day weekend. It is unclear just exactly when gas prices may go down.

“The good news is generally gas spikes are not sustainable,” Laskoski said. “After two weeks, it will probably go down.”


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