on October 1, 2008 by in Uncategorized, Comments (0)

Gasoline supply expected to improve

OCONEE, PICKENS — Most service stations in Oconee and Pickens counties had a larger supply of gas Tuesday, but experts say it may take until well into October before the supply effects of Hurricanes Gustav and Ike recede.

Brandon Wright, manager of communications for the Petroleum Merchants Association of America (PMAA) believes while the production at previously shut down refineries is still picking up in the Gulf of Mexico, a strong consumer reaction has worsened the supply and demand balance of gasoline as it is produced and shipped.

“What is contributing to it now, I think, is a lot of consumers are filling up when they don’t need to, stockpiling gasoline and those sorts of behaviors,” Wright said. “That really isn’t helping things. We saw immediately following Gustav and Ike that refineries shut down, and you didn’t have any new product coming online.”

Now that most of the refineries are once again operational, it will take time for them to gain full productivity, Wright said. The insatiable appetite for gasoline in the midst of spreading panic about supply means what the refineries do produce is quickly gobbled up by the public.

“Now that refineries are back and running, product is coming through,” he said. “But there at the other end are consumers there to scoop it up. It’s becoming an overwhelming consumer response. If you turn on a 40-foot garden hose, the water doesn’t come out immediately. It has to work its way there. If you have a bucket collecting every bit of that water, you don’t have enough for all your plants. Consumers are just taking every drop that is coming online right now.”

Wright and Michael Fields of the South Carolina Petroleum Marketer’s Association (SCPMA) both say allocations of product are down at most filling stations due to the weak supply and disproportionate demand. Wright said the most accurate estimate of time it will take for states like North Carolina, South Carolina and Georgia to gain a more regular gasoline supply is a matter of weeks.

“The projection I hear the most often is a few weeks,” he said. “I don’t think it will be that long. But it will take time, and it will take consumers taking a deep breath and realizing a steady supply is on the way.”

Fields said while Tuesday saw a significant improvement in supply when compared to Monday’s shortages, there were still “tight supply issues” across the state of South Carolina, and that severe shortages were still being observed in spots across the state. Refineries in the Gulf that supply the vast majority of gasoline to the Southeast are operational but are only at 57-percent production, severely limiting allocations, Fields said.

Rumors and whispers of shortages create a self-fulfilling prophecy due to a run on gas stations that quickly depletes supplies in some locations, Fields said. The key to avoid running out of gas on the interstate is striking a balance in behavior at the pump, he said. In other words, drivers shouldn’t wait until they are on empty in case stations nearby are in fact depleted, but those with a nearly full tank shouldn’t top it off for supply fears.

“There are areas where significant panic-buying is still going on,” Fields said. “None of these locations is getting its full allocation. We still have to be conservation-minded because this will take some time.”