Gasoline prices spike as Colonial begins bypass around damaged line
By David Gaffen
(Reuters) - Retail gasoline prices surged due to continuing problems with Colonial Pipeline Co's gasoline line that carries fuel to the U.S. East Coast, as the company started to construct a bypass line around the leak.
Colonial said on Saturday evening that it would construct a bypass that circumvents the leak, which occurred more than a week ago in Shelby County, Alabama. It is unclear when construction will be completed but the company has previously said it anticipates reopening the line, which can carry up to 1.2 million barrels of gasoline a day, later this week.
The volume of the spill is estimated to be between 6,000 and 8,000 barrels.
The average price of a gallon of regular gasoline in Georgia rose to $2.26 as of Sunday morning, according motorists' advocacy group AAA, up more than six cents overnight and more than 15 cents in a week. Prices were up 4 cents in North Carolina to $2.136 and 4 cents in South Carolina to $2.011.
Local media reports have shown gasoline lines forming across the U.S. Southeast due to the shutdown and analysts believe that retail prices could be affected for more than two weeks. New York gasoline futures are up 9 percent in the past week, and rose 0.68 percent to $1.4715 a gallon after the market opened for trading at 6 p.m. EDT on Sunday (0000 GMT Monday).
Colonial shut its main gasoline and distillate lines that run from the Gulf Coast to the East Coast on Sept. 9 after the leak was discovered. The damaged Line 1 can carry 1.2 million barrels of gasoline per day and runs from Houston to Greensboro, North Carolina.
Several states in the Southeast have issued emergency orders waiving certain rules that restrict transport of fuel by road in order to keep filling stations stocked with fuel. It is unclear how quickly the pipeline will be fixed.
"I don’t take much solace in Colonial's updates," said Patrick DeHaan, a petroleum analyst who writes a blog called Gas Buddy. Continued...