Posted on Fri, Sep. 23, 2005


S.C. governor: Conserve gas again; Rita impact unclear



Hurricane Rita's wandering aim could determine whether motorists in the Carolinas and across the country face a small and temporary bump in gasoline prices or must adjust their budgets to absorb a bigger hit over a period of weeks.

With the possibility the storm could disrupt the flow of gas to South Carolina - much like Hurricane Katrina - Gov. Mark Sanford on Friday asked residents to use common sense and limit gas purchases to their immediate needs.

"At this point, we don't know exactly what kind of effect Rita is going to have on prices and supply," Sanford said. "In the meantime, people once again need to ride to the Friday night football game with a neighbor, ride to lunch with a co-worker or ride to the grocery store with a friend from down the street.

"Also, we have to remember our neighbor at the gas pump and not attempt to fill up every five-gallon tank we've got in the back of the garage. That same kind of common-sense conservation helped get us though the previous storm, and will go a long way toward helping us weather this one."

Sanford also said residents should report suspected price gouging on his Web site, http://www.scgovernor.com/.

Oil-industry experts say Rita's changing projected path and wavering power make it difficult to predict how much damage it will do to refineries on the Gulf Coast in Texas and Louisiana. But experts agree that the Houston area - home to 13 percent of the U.S. oil- refining capacity - will not be spared the brunt of the storm.

The storm will reduce the supply of gasoline and other refined products no matter what because just about every major refinery around Houston and Port Arthur, Texas, 100 miles away on the Gulf Coast, shut down ahead of Rita's arrival. Together, the areas represent 20 percent of U.S. capacity.

"Best case, it costs us 2 million barrels a day (of refining production) for about three days," resulting in gas prices briefly rising 5 to 15 cents per gallon, said Fadel Gheit, an energy analyst for Oppenheimer & Co. "But if it hits Houston hard, four or five refineries could be flooded."

Gheit declined to offer a price forecast for the worst-case scenario.

Energy Secretary Samuel Bodman said even if the Gulf Coast refineries escape serious damage, the public should be ready for interruptions of supplies for two or three weeks.

"We will be dependent on attracting cargoes (of gasoline) from abroad which are already en route," he said.

Later, an Energy Department spokesman clarified Bodman's remarks, saying he was referring to local disruptions in Texas and that the administration does not expect a significant effect nationwide.

Some local residents are not taking any chances.

"I heard it might go up, so I want to be safe," said Linda Sherman, a Tiger Mart employee who was filling up at her company's Hess station in Myrtle Beach. At $2.75 for a gallon of regular unleaded gasoline, the price at the pump has fallen from the $3-plus peak after Hurricane Katrina.

The average price for a gallon of self-serve regular in the Myrtle Beach area Thursday was $2.79, according to AAA Carolinas. In the Brunswick County, N.C., area, the average was $2.76 a gallon.

But AAA had some reports of 10-cent-per-gallon increases Thursday around the Carolinas.

Charleston-based economist Al Parish predicted prices could rise 8 to 10 cents - as opposed to the 30-cent jump after Katrina - partially because eight state attorneys general are investigating oil companies for price gouging.

"I think that may scare the oil companies a little bit," Parish said. "The second thing is, the futures market hasn't soared the way it did before Katrina. It's back above $2, but it hasn't gone up anywhere near what it was with Katrina."





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