storm surge at pump: fuel to $5/gallon

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    Storm surge at pump - Some see $5 gas
    By Jay Fitzgerald
    Friday, September 23, 2005 - Updated: 07:33 AM EST

    The specter of panic gas buying, fuel shortages and $5 pump prices reared its ugly head yesterday as Texas – and the entire nation – braced for Hurricane Rita to slam into energy-critical areas along the Gulf of Mexico.

    The American Petroleum Institute went so far as to urge motorists not to top off their gas tanks and to turn off their car air conditioning to preserve fuel.

    Meanwhile, Energy Secretary Sam Bodman said ``there will be disruptions'' due to Rita, with many Texas refineries and Gulf oil rigs already abandoned as the hurricane barrels toward coastal regions.

    Peter Beutel, an oil analyst with Cameron Hanover in Connecticut, said he can see some ``spot shortages'' of gas and, in a worst-case scenario, even $5 gas in some places if Rita does maximum damage to key oil refineries.

    ``I don't think it's going to happen, but I can see it hitting $5 (a gallon) if the worst develops,'' he said.

    There's a distinct possibility of gasoline, which only recently fell below $3 a gallon after spiking following Hurricane Katrina, hitting $4 a gallon in some places, he said.

    But Sarah Emerson, director of petroleum research with Energy Security Analysts in Wakefield, scoffed at talk of $5 gas. ``You might have a spike in prices. But $5, I think you'd have to have total chaos, total devastation'' to refineries in Texas or elsewhere.

    ``Five dollars seems a little alarmist to me,'' said Art Kinsman, a spokesman for AAA Southern New England.

    Still, prices will probably shoot once again well over $3, he said.

    Yesterday, the average price of regular gasoline in Massachusetts was $2.93, down a penny from the day before and 27 cents off the record high set Sept. 11 in the wake of Katrina.

    Paul O'Connell, executive director of the New England Service Station and Automotive Repair Association, didn't discount the possibility of gas at $4 a gallon, assuming Rita inflicts severe damage. ``We almost hit $4 after Katrina,'' he said.

    The hurricane is expected to hit somewhere near Houston late today or early tomorrow, according to computer models.

    http://business.bostonherald.com/businessNews/view.bg?articleid=103836
 
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