Hurricane Harvey impact plus Labor Day travel demand result in significant price increases at the pumps

AAA

TOPEKA – As Hurricane Harvey impacts oil production on the Texas Gulf Coast and many Kansas prepare to hit the roads for the traditionally busy Labor Day travel weekend, motorists are feeling the pain when filling up their gas tanks.

According to AAA Kansas, gas prices have been on the rise for the past week to 10 days. The average Kansas per gallon price is $2.28 today, up five cents from Tuesday (Aug. 29) and up 10 cents from its Aug. 21 statewide average of $2.18.

“While retail prices are moving moderately, motorists can expect to see additional increases at the pump,” said Jennifer Haugh, spokesperson for AAA Kansas. “The near-term combinations of Labor Day, increased demand and the tightened supply levels in the Gulf means motorists are likely to see gas prices increase up to another 15 cents in the coming week.”

Big jumps at the pump have already been seen in Kansas communities. In the Wichita area, major gas station retailers boosted per-gallon prices from $2.29 to $2.49 in many locations today. Average gas prices in Topeka are at $2.28 today, up eight cents in the past week, according to AAA Kansas.

Other key points:
• To put the current Harvey-inflated gas prices in perspective, today’s Kansas average of $2.28 per gallon is the second lowest Labor Day weekend price in the past 13 years, according to AAA Kansas. (See chart: History of Labor Day Gas Price Averages in Kansas.)
• About 19 percent of oil refining capacity in the Gulf Coast is currently offline. While those production facilities are down, the U.S. market is losing about 3 million barrels of gasoline a day.
• Refinery damage is still unknown, as many areas in Texas are still impacted by floodwater. It will take time to assess damage and any longer-term impact on refining capabilities.
• Today’s national average gas price is $2.40, and Harvey’s impact is likely to drive gas prices to the highest we’ve seen this year, which was $2.42 in March.
• If refineries are down for an extended period of time, the national average could be more than $2.50/gallon, which the United States hasn’t seen since Aug. 28, 2015.
• It’s important to note that AAA expects this to a noticeable yet short-term spike in gas prices. AAA forecasts prices to drop by mid- to late-September, when refiners should be back online and the traditional spike in demand due to heavy summer travel has subsided.