Where Long Island gets its gas and how prices are impacted by the Iran war

The Iran war has disrupted global energy markets sending gasoline prices on Long Island soaring, but the average price of a gallon of unleaded is lower here than in the state and nation.

A key reason, experts said, is that much of the gasoline is produced domestically and delivered to Nassau and Suffolk counties via pipelines and barges instead of more expensive tanker trucks.

Additionally, the region's large concentration of passenger cars and trucks — more than 2 million — encourages fuel distributors to pass along their savings from buying gasoline in bulk, industry officials said. 

The differences in how Long Island gets its gasoline and the high demand here compared with elsewhere in the nation translates into fewer pennies per gallon — that adds up when you are filling up more than once a week, the experts said.

Gene Bernstein, chairman of Northville Industries, a major gasoline distributor with terminals in Suffolk, said the time it takes to transport gasoline to the Island is cut in half because of the availability of ports such as Port Jefferson.

"We’re a relatively compact area even though Long Island is 120 miles long," he said. 

Kevin Beyer, vice president of government relations at the Long Island Gasoline Retailers Association, agreed, saying the combination of accessible supply chain checkpoints and high demand for gasoline is what's slowing the pace of price increases.

"It’s not just because we have easy access, but that we’re getting a better price because you’re buying in bulk," he said.

Global oil prices have surged since the United States and Israel began attacking Iran on Feb. 28, and Iran has threatened both oil production and transportation through the Strait of Hormuz. The strait carries roughly a fifth of the world’s oil supply and 7% of what the U.S. imports, based on data from the U.S. Energy Information Administration. 

The price of Brent crude oil, a global benchmark, has increased from $72.79 a barrel a day before the war to more than $96 a barrel this week. Prices hit $104 a barrel on March 20, still shy of the recent record high of $110 reached in 2022 following Russia's invasion of Ukraine.

Most of the United States' oil supply — 60% — is produced domestically.

What's imported comes primarily from Canada and Mexico, according to American Fuel & Petrochemical Manufacturers, a Washington, D.C.-based trade group representing gasoline, diesel, jet fuel and petrochemical producers.

Long Island’s geography places it near the endpoint of at least two major pipelines: the Colonial Pipeline, which flows from refineries in the Gulf Coast to New York Harbor, and the Buckeye Pipeline, which stretches from New Jersey to Inwood.

"We have water and we have proximity to the termination point for at least one major pipeline and that’s the Colonial Pipeline," said Robert Sinclair Jr., senior manager of public affairs at AAA Northeast.

There are

2.3 million registered vehicles 

on Long Island

2.4 vehicles per household

in Suffolk County

and 

2.2 vehicles per household

in Nassau County, state DMV data shows

As a result, Long Island and its 2.3 million registered vehicles, which make up 21% of all light-duty registered vehicles statewide, benefit from a delivery system that doesn’t have to travel tremendous distances to bring gasoline and diesel to service stations. Being less reliant on fuel delivery by truck means that costs associated with travel are minimized, resulting in a financial benefit for Long Islanders in the form of gasoline prices that are lower here than in other parts of the country. 

Nationally, the average price of gas was $3.98 Wednesday, 10 cents higher than Long Island’s average of $3.88 the same day, according to AAA data.

The gasoline burned in local vehicles first comes to New Jersey via pipeline and oil tanker.

The Colonial Pipeline transports gasoline produced by nearly 30 refineries, most of which are on the Gulf Coast. After reaching Linden, New Jersey, the gas is transported via smaller pipelines to terminals and delivery points," said David Conti, a spokesman for Colonial Pipeline Co. He declined to say how much of the pipeline's supply ends up on Long Island.

In addition to Colonial, the Buckeye Pipeline brings fuel in from New Jersey’s coast to Inwood in Nassau County. 

Andrew Lipow, president of the consulting firm Lipow Oil Associates LLC in Houston, said despite the region’s less-expensive delivery system the savings amounts to "pennies." 

Asked if the method of transporting gas puts a damper on rising pump prices, he said, "It’s small potatoes. Barging isn’t cheap and if you are trucking the stuff all over Long Island there’s the cost of diesel which is going way up." 

The price of diesel is substantially higher than gasoline: $5.71 per gallon on Tuesday compared with $3.87.

"Transportation cost plays a small role," Lipow added. "What we're actually seeing with gasoline prices increasing along with crude oil prices is due to the supply disruption we've seen throughout the Middle East." 

21%

of all light-duty vehicles in NYS are registered on Long Island, state DMV data shows.

Still, those pennies can add up, said Tom Kloza, an independent oil analyst. 

He said in an email that gas purchased from the Gulf region makes it way through pipelines in 25,000 barrel batches, and it costs around 6 cents per gallon to move the fuel to New Jersey. From there, it can either reach Long Island via pipeline or barges at a cost of around a "few pennies" per gallon.

A gas supplier "generally marks up the finished gasoline" by a few cents per gallon before it's purchased by distributors who operate terminals in Queens and on the Island. Gas stations may be charged between 5 and 10 cents per gallon, before setting prices that consumers see at the pump, said Kloza, the former chief oil analyst for the Oil Price Information Service, a Dow Jones-owned price reporting agency for the global energy industry based in Gaithersburg, Maryland.

Long Island’s gasoline supply chain is complex involving pipelines, barges and traditional tanker trucks. Here’s how the fuel consumers pay for at the pump makes it to their communities.

1: From the Gulf to New Jersey

Stretching more than 5,500 miles, the Colonial Pipeline originates in Houston, Texas, and terminates in New York Harbor, according to S&P Global. The pipeline represents a major fuel artery that supplies around 45% of all the gasoline and diesel consumed on the East Coast. Fuel moves through the pipeline in batches at around 5 miles per hour, according to the U.S. Energy Information Administration.

2: From New Jersey to New York

In addition to the Colonial Pipeline bringing gasoline to New Jersey, tankers from overseas also bring fuel into New Jersey. From terminals along the Jersey coast, gasoline is transported via barges to terminals along Long Island’s coasts, primarily in Port Jefferson, Inwood and Glenwood Landing along the Island’s North Shore.

3: Buckeye Pipeline’s role

One of the smaller pipelines that transport gasoline is the Buckeye Pipeline, which stretches from Linden, New Jersey, to Queens and Inwood in Nassau County. Gasoline is sent to terminals in Inwood and Long Island City, according to Buckeye Partners, which owns the pipeline.

4: On the Island

In Port Jefferson, the gasoline is piped to an East Setauket storage facility where certain additives can be mixed in, according to Northville Industries, which owns the facility. From there, gasoline is then piped to Northville’s Holtsville terminal. Using "racks," or large overhead piping connected to the storage tanks, gasoline is placed inside tanker trucks that will soon hit the road.

5: At the pump

Once gasoline is loaded onto tanker trucks at terminals, the trucks set off on the road to reach service stations across Nassau and Suffolk counties.