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Local gasoline prices rise in Harvey's wake

Gasoline prices in Buffalo are rising, a ripple effect of Hurricane Harvey hitting Texas.

The average local pump price on Friday was $2.52 per gallon, up 4 percent from just a week ago and the highest price in nearly two years, according to the AAA. The average price was also up 7 percent from a month ago.

The national average was $2.51, the highest recorded price so far this year, and the New York state average was $2.60. Among the state's eight major metro areas, Buffalo was tied with Albany and Syracuse for the lowest average price, according to AAA data.

Until the spike following Harvey, Buffalo's gas prices were relatively stable. The local average increased to $2.49 in late April, before dropping to as low as $2.33 in mid-July. The average pump price in Buffalo is now up 18 cents per gallon from two months ago.

The price spike has been steepest at stations located on Native American reservations. Prices at some stations on the Seneca Nation reservation in Irving, which had been below $2 a gallon as recently as last weekend, have jumped by as much as 30 cents a gallon.

While gas prices in Buffalo have risen lately, they remain far below the record high of $4.27 per gallon, set in July 2008.

Harvey has caused widespread damage and flooding in Texas and Louisiana since first making landfall on Aug. 25. But with Houston and the Gulf Coast serving as a hub of the petroleum industry, other corners of the country have felt the storm's effect.

Harvey forced a number of refineries to shut down or operate at reduced rates, leaving an estimated 20 to 25 percent of the country's oil refining capacity idled. The Gulf Coast accounts for more than 45 percent of the nation's total refining capacity, according to the Energy Information Administration.

Allison Mack, a petroleum industry analyst with, said a gasoline supply "squeeze," rather than a shortage, has driven up prices. "The bottleneck is at the refining level." The U.S. Department of Energy reported 10 refineries along the Gulf Coast were shut down as of Thursday.

Part of the Colonial Pipeline, which extends from Houston to New York, was shut down by the storm. The 5,500-mile system helps many Gulf Coast refiners move their products to markets across the Southern and Eastern United States, according to the company that operates it. The Houston segment of the pipeline might resume service on Sunday.

Harvey was not the only influence on pump prices this week. Labor Day is traditionally a high-demand period for gas, as motorists fuel up for road trips on the unofficial last weekend of summer. The Energy Information Administration noted that the national average last Monday was $2.40 per gallon, the second-lowest price on the Monday before Labor Day since 2004. But that price did not yet fully reflect Harvey's impact.

NOCO president James D. Newman said the company anticipates "severe impacts on gasoline supplies to our region. While we do not want to speculate on how much the cost of gasoline will increase here, we are already starting to see a dramatic impact."

Newman noted Western New York relies on Gulf Coast refineries that supply gasoline and other fuels to pipelines serving the Northeast. "NOCO is extremely sensitive to gasoline and fuel prices and the impact on our hard-working customers and we will continue to monitor this situation very closely," he said.

How soon might prices in Buffalo return to pre-Harvey levels? That will depend in large part on the Gulf Coast refineries, said Elizabeth Carey, a spokeswoman for the AAA of Western and Central New York. "It's really just a matter of when they can get back on track."

The refineries' challenges include a loss of electricity, whether workers can get to their jobs and the facilities' ability to gather and distribute crude oil and petroleum products, according to the Energy Information Administration.

Mack said the refineries still need to determine the extent of the storm's impact on their facilities. "Refineries are slowly coming on line, but it's going to take a while."

The U.S. Department of Energy has authorized the release of 1 million barrels of oil from the Strategic Petroleum Reserve. Mack doubted that will have an immediate impact on pump prices. "That's oil. Oil still needs to be refined."

Another factor that could help lower pump prices is an annual one. Carey said refiners typically switch to making a winter blend of fuel – which is less expensive to produce – around mid September.

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