Despite Thin Supplies, Motorists May See Cheaper Gasoline Prices This Week

By Randy Key

Published: September 28, 2008

Tampa, FL (September 28)—According to AAA, motorists should see retail gasoline prices inching down this week, but there are still supply problems in areas of Georgia, Tennessee, and western sections of the Carolinas.

According to the U.S. Department of Energy, the refineries along the upper Texas Gulf Coast and Western Louisiana that were most affected and shuttered by Hurricanes Gustav and Ike are in varying stages of operation. Four of those refineries remain off-line due to no power; five are in the process of re-starting; and nine others have begun production but at reduced capacity. Bloomberg reports that the Colonial Pipeline, the nation’s largest fuel pipeline that delivers gasoline to large portions of the Southeast, is running at low capacity.

“Even though overall gasoline and crude oil inventories are below normal, according to last week’s report from the Energy Information Administration, Wholesale gasoline futures on the New York Mercantile Exchange (NYMEX) dropped just over three cents to near $2.665 a gallon and crude oil dropped, on traders concerns that the economy will get worse and demand for energy fall, a dollar on Friday to close at $106.89 per barrel. However, there is still a lot of uncertainty in the market with the U.S. Government $700 billion bailout situation unresolved. Nevertheless, it is likely retail gasoline prices will drop this week,” said Randy Bly, director of community relations for AAA Auto Club South.