Ike Spike
In the wake of Hurricane Ike's devastation, and the resulting shut-down of many of this nation's oil refineries, some gas stations have taken the opportunity to raise gas prices through the roof. In some cases breaking the $5.00/gallon barrier, with station owners blaming shortages for the drastic price increases. Florida's Attorney General's office sees things a different way, blaming the drastic price increases solely on price gouging. After receiving more than 350 complaints from the public, the AG's office is set to serve four gas companies with subpoenas in order to ask for documentation justifying the price increases.
While oil prices have retreated below $100/barrel, the gas spike following Hurricane Ike shows how quickly an circumstances can cause energy prices to quickly rise. Whether it is a hurricane, political instability or a terrorist attack, we are very much at the mercy of events that are beyond our control, when it comes to gas prices. It is important to keep this in mind when you are shopping for a new or used vehicle. You should ask yourself if your budget can comfortably withstand a sudden and/or prolonged spike in gas prices and whether or not you have a sufficient income cushion.
- Posted by
- Lee Scott September 15, 2008, 12:00 PM
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- Categories:
- Car Buying, Fuel Economy, Used Cars
- Technorati Tags:
- fuel economy, gas prices, oil prices
Have we historically had crazy increases in the price of gas when there's been a substantial hurricane? This whole thing seems like a relatively new phenomena.
bn, i dont know for sure.
but math wise.
a 20% incearse of $2/gallon gas = 2.40 gas
at $4/gallon = 4.80.
so percentage wise it might be the same, but i'm not sure.
in the midwest it went from 3.70 to 4.30
The important factor here is the Ike forced the complete shutdown of most of the refineries along the gulf coast. Unlike a light switch, you can't just "turn on" a refinery and have it up and running instantly. It take a period of days, or even weeks, to get one fully up to speed again.
The last time oil was at this price, gas was $3/gal. Assuming the price is already inflated, running it up to $5 is more than a 60% increase. That's a pretty hefty percentage over where it "should" be.
Unlike before, refineries have been running well below capacity. This should make it easier for the rest of the refineries to fill in.
Oil prices are down. Demand is down. Refineries are underutilized. I'd rather not jump into conspiracy theory, but it ain't easy.
brn - its more complicated then that. because it depends on the area.
for example in the midwest, texas supplies around 40% of our gas. I'm assuming that in the south-eastern states its even greater.
The combine that with the need for various blends all hell can brake loss.
It just gives more evidence to the need for a few standard blends.