Local gasoline prices have plummeted in the past week, dropping 21.6 cents per gallon.
But those prices might soon rebound even higher, as the oil industry deals with the fallout from Hurricane Sandy.
“With Hurricane Sandy headed for East Coast, there are a number of uncertainties in regards to the impact at the pump for various fuels,” said GasBuddy.com Senior Petroleum Analyst Patrick DeHaan. “There is very little to look back at history and compare this storm to, and so far, it remains to be seen exactly how gasoline and diesel prices will be impacted.”
While the exact impact remains uncertain, Hurricane Sandy is already having an effect on supply.
Two major refineries have shut down – Hess’ 70,000 barrel per day refinery in Port Reading, N.J. and Phillips 66’s 238,000 bpd refinery in Linden, NJ. The reduced gasoline supply will likely lead to an increase in wholesale prices.
But as major cities braced for and recover from the storm, demand for gasoline has likewise declined. With schools, public transit, and even some highways closed, fewer people will be driving, reducing demand.
The impact of flooding remains to be determined; either refineries could be shuttered for longer than expected, further reducing supply, or people will remain at home longer, further reducing demand.
“For motorists west of the Mississippi, there may be little change in prices because of the storm, but as you head east, especially in the states to be highly impacted, there may be disruptions at various levels,” DeHaan said. “However, any disruptions in supply may be offset by area-wide shutdowns of business, leading to curtailed demand for fuel.”
For now, at least, local drivers will see a bit of relief at the pump.
Gasoline prices now average $4 per gallon in Stanislaus County, per GasBuddy.com. Local prices are still 27.7 cents per gallon higher than the same day a year ago, but are 3.9 cents per gallon lower than a month ago.
That’s still more expensive than the $3.56 national average, which fell 9.6 cents per gallon in the same period.
In Turlock, prices hover below the countywide average. A gallon of regular unleaded gasoline can be purchased for as little as $3.73 per gallon.