Gas prices to spike as Harvey takes out refineries

- Drivers across the U.S. will see Hurricane Harvey’s impact at the gas pump, as the energy hub of southeast Texas faces devastating floods with the storm continuing to churn near the Gulf Coast.

Some gas stations around the Queen City are up 30 cents per gallon.

Houston, America’s fourth-largest city, and the surrounding area are facing what the National Hurricane Center has called catastrophic and life-threatening floods. Emergency crews have made 3,000 water rescues since Harvey arrived late Friday, and government officials have warned that flooding could become worse as more rainfall hits the region. The National Hurricane Center says Harvey, now a tropical storm, is expected to affect Texas and southwestern Louisiana through Friday.

In addition to swamping homes and businesses, Harvey took out an estimated 16 percent of the nation’s refining capacity, crimping the industry’s ability to produce gasoline and other fuels. Energy companies, including Exxon Mobil (XOM), Valero (VLO) and Royal Dutch Shell (RDSA), have temporarily shut down refining plants near Corpus Christi and Houston. The Texas Gulf Coast is home to about 30 refineries that account for nearly 30% of U.S. capacity. Ten of those refineries had shut down by Monday, based on a tally by S&P Global Platts.

Motorists throughout the U.S. should expect gasoline prices to jump, while consumers driving in Texas, Louisiana and neighboring states will see the largest increase in the coming days and weeks. Patrick DeHaan, senior petroleum analyst at GasBuddy, said the national average could climb as much as 10 cents a gallon this week, followed by another gain of 5 to 10 cents next week. The Gulf Coast will see prices climb roughly 25 to 30 cents. By comparison, Hurricane Katrina sent the national average about 50 cents higher.

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