Summer gas shortage pushes pump prices up
A temporary shortage of summer gasoline, which is being phased out for the season, has sent gasoline prices soaring on Long Island since last week -- by almost 12 cents a gallon on average.
Analysts say the summer gasoline, required by clean-air laws, will be replaced beginning Sunday with winter gasoline, which is cheaper to produce. In preparation for the switch, refineries stopped producing summer-grade gasoline.
That transition usually occurs without a blip in prices, but this year, supplies are crimped by the lingering effects of Hurricane Isaac, which forced the temporary closure of six refineries in Louisiana, and by a shortage of refinery capacity in the Northeast from the closures within the past year of three refineries -- one in the Caribbean and two in Pennsylvania.
"In the past, there were other sources of supply that were around," said Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc. "Now those alternative supplies no longer exist."
That shortage was a major cause of price increases here this summer, from a recent low of $3.63 a gallon on July 2.
Another refinery in Pennsylvania, operated by the Carlyle Group with Sunoco, shut a unit for unplanned repairs on Sept. 4, further aggravating the crimp in supplies. It restarted Wednesday, Lipow said.
Kevin Beyer, a gas station owner and president of the Long Island Gasoline Retailers Association, predicts the run-up in prices will be short-lived: "I think everything is going to start stabilizing now."