Gas prices locally and across the nation have soared after Hurricane Harvey slammed into Texas. One quarter of the oil refineries that serve the U.S. were in the path of Harvey and were shut down for over a week.
Also, the Colonial Pipeline, which is a 5,500-mile system that begins in Houston and ends in Linden, N.J., was shut down. The pipeline hauls more than three million barrels per day of refined products, including gasoline, diesel and jet fuel from the Gulf Coast refining hub to the populous northeast and numerous stops along the way, including southeast Georgia.
While it is projected that the refineries and the pipeline will reopen this week, it will take several weeks for the supply to level out and for prices to adjust back downward. Even with these outages, there is still ample supply to cover U.S. demand. Fear of shortages causing a run on gas pumps has had the most dramatic effect on the supply, which has caused prices to run up.
In Statesboro, prices increased more than 40 cents per gallon in a week. With multiple locations in Bulloch County dozens in southeast Georgia, Parker's is known for their aggressive pricing in the market. Jeff Bush, chief operating officer for Parker's, offered his opinion on what the Statesboro area will experience as far as pricing and supply.
"First I want to let our customers in the Statesboro and Bulloch County area know that there is no current shortage of gasoline," Bush said. "We may experience some fear driven outages throughout our 49 store service area, but if we do, they will be temporarily. At this point, I am not aware of any outages. We had prepared for this storm and our team had worked to move assets to ensure our supply chain would hold up to demand."
Bush conceded that Harvey's impact was bigger than anyone anticipated, but he said Parker's is aggressively negotiating the best prices possible for customers. Parker's purchases fuel several times per day based on demand and must pay what the supplier charges. Bush said Parker's margins on fuel are very narrow.
"Our clients can look at Yahoo Financial and see exactly what we are paying for a gallon of gasoline," he said. "You then add six to seven cents freight charges, 51 cents in federal, state and local taxes and 3 percent in credit card fees and you can determine where we should be pricing. Our supply side has increased 70 cents per gallon but we have been able to hold them to 40 cents per gallon based on internal efficiencies."
In volatile situations like the one created by Harvey, gas prices can even change while a customer is at the pump. Bush said the price is based on the current cost of supply.
"Fuel is not a first in, first out commodity," Bush said. "Once new fuel is purchased, it is mixed with the fuel in the tanks so prices have to be adjusted accordingly."
Bush reiterated that Parker's is committed to get the best price of supply for customers.
"We understand that when prices change in Statesboro it hurts everyone's wallet," Bush said. "We understand this and are working hard to focus on pushing the best product at the best price to our customers. We were very proud of the fact that Parker's were the last stores to close and the first to open after Hurricane Matthew. We appreciate our customer's loyalty and work hard to earn that every day."