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Pipeline hack causing spike in gas prices
Parker’s limiting gas fill-ups to $50
gas
Gas stations display the price of gasoline in Leonia, N.J., Monday, May 10, 2021. (AP Photo/Seth Wenig)

WASHINGTON – Gasoline prices in Georgia have jumped 11 cents since Monday following the shutdown of a major pipeline hit by a cyberattack and fuel shortages were reported across the Southeast Tuesday.

The Alpharetta-based company that supplies nearly half of the gasoline consumed on the East Coast reported a ransomware attack that forced a shutdown of a 5,500-mile pipeline running from Texas to New Jersey. The FBI blamed the attack on DarkSide, a group of hackers believed to operate out of Russia or Eastern Europe.

Colonial’s 5,500-mile pipeline system runs through Georgia from Texas to New Jersey.

There were reports Tuesday of gas stations in the Southeast running out of gasoline, according to Gasbuddy.com, which tracks outages and prices. In Virginia, 7.5% of the state’s 3,880 gas stations reported running out of fuel. In North Carolina, 5.4% of 5,372 stations were out, the company said.

Scattered gas stations in metro Atlanta were out of fuel Monday and Tuesday, but most were operating normally. In Georgia, nearly 4% of 6,368 stations had run out of fuel, Gasbuddy.com said.

In Florida, just 2% of the gas stations had run out of fuel. Nevertheless, consumers in some areas faced long lines.

Officials say the shortages are primarily driven by panic buying.

“A lot of that is because they’re selling three or four times as much gasoline that they normally sell in a given day, because people do panic,” said Tom Kloza, a veteran analyst with S&P’s Oil Price Information Service. “It becomes a self-fulfilling prophecy.”

Gas prices in Georgia were averaging $2.87 a gallon Tuesday, according to AAA. That's an 11-cent jump since Monday and a 16-cent jump since last week.

The states most dependent on the pipeline include Alabama, Georgia, Tennessee and the Carolinas, he said.

An email sent to PumpPal customers Tuesday afternoon from Parker’s Convenience Stores, which has five locations in Bulloch County, read:

“Due to the shutdown of the Colonial Pipeline, we are implementing a temporary $50 limit on fuel purchases for all customers. The Parker’s fuel team is working diligently to keep our tanks filled in the wake of this unexpected situation. While we understand that this is an inconvenience, know that we are doing everything we can to source fuel and keep gas readily available for our customers.”


To help relieve gasoline shortages brought on by the shutdown, Gov. Brian Kemp issued an executive order suspending federal regulations governing the number of hours commercial truck drivers can operate and waiving normal weight, height and length limits on trucks subject to state “oversize” permits.

The order also suspends the collection of gasoline and diesel fuel taxes during the emergency and prohibits price gouging.

Georgia collects a gasoline tax of 28.7 cents a gallon and a diesel tax of 32.2 cents a gallon. The tax is collected by distributors and paid to the state.

Georgia governors have issued similar executive orders during other disruptions in fuel supplies, usually following hurricanes or other natural disasters that affect refineries or pipelines.

The shutdown of the Colonial pipeline is expected to send pump prices higher and force refiners to cut production because they can’t transport the fuel.

Kemp urged motorists not to panic.

“There is no need to rush to the gas station to fill up every tank you have and hoard gas,” he said. “With the measures we have taken today, I am hopeful we can get more supply to stations and get through to this weekend when we hope Colonial will return to normal.”

Colonial officials say they are working on “substantially restoring operational service” by the end of this week.

If the pipeline outage persists, the industry may want to turn to barges to transport fuel, but that could require a waiver of the Jones Act, a U.S. maritime law that requires products shipped between U.S. ports to be moved by American-flagged ships.

Gasoline futures ticked higher Monday. Futures for crude and fuel, prices that traders pay for contracts for delivery in the future, typically begin to rise anyway each year as the driving season approaches. The price people pay at the pump tends to follow.

The average U.S. price of regular-grade gasoline has jumped 6 cents over the past two weeks, to $3.02 per gallon, which is $1.05 higher than a year ago. The year-ago numbers are skewed somewhat because the nation was going into lockdown due to the pandemic.

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