U.S. pump prices rise as Colonial preps gasoline line restart

September 19, 2016 2:38 PM EDT

Out of fuel signs are pictured on gas pumps at a Twice Daily Shell station on West End Ave. and N. 17th Ave. S. in Nashville, Tennessee, U.S. September 17, 2016. REUTERS/David Mudd


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By Devika Krishna Kumar

NEW YORK (Reuters) - Gasoline prices in the southeast United States kept rising on Monday as Colonial Pipeline Co worked to fix a more-than-week long disruption on a key gasoline line due to a leak that has led to long lines and complaints of price gouging.

The leak, which was discovered on Sept. 9, released about 6,000 to 8,000 barrels (252,000-336,000 gallons) of gasoline in Shelby County, Alabama. The partial shutdown of the damaged Line 1, which carries about 1.3 million barrels per day of gasoline from the refining hub on the Gulf Coast to the East Coast, also roiled markets.

Retail gasoline prices in Georgia, one of the hardest hit states, jumped nearly 6 cents overnight to Monday, or more than 20 cents higher than a week ago, to $2.316 a gallon on average, according to motorists' advocacy group AAA.

Richard Parks, 32, an electrician in Atlanta, said he saw the price of regular gas jump at a Shell Station in East Atlanta to $2.69 on Monday from $2.51 on Sunday.

"I didn't think it would get worse overnight, but it just did," Parks said while waiting in a line to refuel on Monday.

Benchmark gasoline futures fell 2 percent on Monday to $1.4318 a gallon, after having risen 9 percent in the week following the leak.

Availability of fuel has varied across the region, with long lines seen throughout Atlanta, as well as in Nashville, Tennessee. Pump prices in Alabama ticked up to $2.01 on Monday while prices in Tennessee rose nearly 3 cents to $2.13 from $2.10 on Sunday, according to the AAA.

Alabama Governor Robert Bentley said during a press conference Monday he was "concerned" about the amount of gasoline the state has and said Colonial's chief executive told him Monday that the line would likely restart this week.

Georgia Governor Nathan Deal signed an executive order on Monday preventing gas stations from significantly raising their fuel prices.

In North Carolina, more than 400 consumers had filed complaints to report potential gas price gouging to Cooper's Consumer Protection Division as of 11 a.m. ET (1500 GMT) on Monday, State Attorney General Roy Cooper said.

Many states have also allowed for an extension of the maximum number of hours truck drivers are allowed to drive in order to deliver gas products to the state.

RELIEF SUPPLIES

Colonial, which has not said what caused the leak, resumed repairs on Friday after vapors delayed work and it projects a full restart by this week. The company is constructing a bypass that circumvents the damaged line.

The bypass line will be about 500- to 700-feet (150-210 m) long and will essentially have the same specifications as the main line in terms of pressure and capacity, a spokesman said via email. However, the bypass will sit above the ground while the permanent solution will include a fully operational submerged line, he said.

Colonial, the largest U.S. refined products pipeline system of about 2.6 million bpd, said on Monday it gathered gasoline from Gulf Coast refiners last week to transport the fuel on its distillate line to markets throughout the region.

A spokeswoman for Marathon Petroleum Corp, a shipper on Colonial and the operator of Speedway convenience stores, which are located throughout the U.S. East Coast, said the company was using additional shipping methods including barges, trucking and ocean vessels to manage supply.

Larry Carr, 44, an Atlanta private contractor, was filling gasoline containers and piling them into the back of his Ford Explorer van just after topping up his tank at a station in the Grant Park neighborhood where it cost $2.49 for regular self-serve.

"Normally it would cost me $40 to fill her up, but today it cost $60 and I wasn’t even near empty," he said. Of the gasoline cans, he said: "I'm going to take some of this to a friend who ran out of gas and get her going again."

(Reporting by Devika Krishna Kumar, Jarrett Renshaw and David Gaffen in New York and Rich McKay in Atlanta; Editing by Bill Trott and Marguerita Choy)



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