Gas Prices Jump Despite Bush Move

Motorists drive past a gas station with prices posted well above $3 per gallon Wednesday, Aug. 31, 2005 in Kansas City, Mo. The station ran out of regular unleaded gasoline earlier Wednesday and the station's owner expected to run out of other grades by the end of the week. Gas prices nationwide have skyrocketed as a result of supply disruptions caused by Hurricane Katrina. (AP Photo/Charlie Riedel) AP

Service station manager Randy Schuette is getting quite a workout changing the gasoline prices on his station's large sign.

"I bet I'm not done, either," he said Wednesday, hoisting price placards with a 20-foot pole at his station in Bismarck, N.D. At one point, he ran out of decimals, so a gallon's cost read $317.

"I don't have any three's with decimal points," he said. "Never needed them. I'm assuming people know that it's not $317 a gallon, but the day's not over yet, either."

Price hikes were evident at stations nationwide Wednesday as gasoline costs breached $3 a gallon in numerous states, the result of fuel pipeline shutdowns and delayed deliveries since Hurricane Katrina devastated Louisiana and Mississippi earlier this week.

In Washington, the Bush administration decided to release crude oil from the federal petroleum reserves after Katrina knocked out 95 percent of the Gulf of Mexico's output. But because of the disruptions and damage to the refineries, gasoline prices seemed to pay no heed.

Gas prices jumped by more than 50 cents a gallon Wednesday in Ohio, 40 cents in Georgia and 30 cents in Maine. The increases followed price spikes on wholesale and futures markets Tuesday after the hurricane knocked off-line refineries and pipeline links along the Gulf Coast that provide about a third of the country's gasoline supplies.

CBS affiliate KMTV in Omaha reports that prices jumped twenty to thirty cents overnight Wednesday, taking the price for a gallon of unleaded more than $3 per
gallon. One station had premium selling for $3.51 per gallon.

Measures across the U.S. are being advised to compensate for the high prices. North Carolina Governor Mike Easley Wednesday asked motorists across the state to reduce their driving time, CBS News reports.

Concerns are now mounting over limited supplies of gasoline, including the possible return of long lines and scarcity reminiscent of the 1970s gas crisis.

"It's crazy," said Mike Currie of Bismarck, shaking his head as he topped off his truck's tank with gas. "I'm going to have to consider buying a Moped."

Analysts expected some relief once electricity is restored to Gulf Coast pipelines and refineries, but they are unsure how long that will take.

Crude oil prices, however, dipped Thursday after the Bush administration's decision to tap U.S. strategic reserves to help companies hurt by Hurricane Katrina, but gasoline futures jumped 3 percent because of worries about storm damage to refineries in the Gulf of Mexico.

This week's increases come atop a 40 percent price rise in the last year that boosted the average retail price of unleaded regular to $2.61 a gallon nationwide last week, Energy Department figures show.

"We don't have a shortage of gasoline. We have a delivery problem," said Bill Weatherspoon, executive director of the North Carolina Petroleum Council, which represents major retailers that get gasoline from the pipelines.

The hurricane's effect reached all corners of the United States, but one place stung particularly hard is Detroit, the Wall Street Journal reports. According to AAA, stations in the Motor City are charging about $3 per gallon. And in the auto industry's American hometown, the greatest fear is that higher oil prices will shift consumers' auto-buying habits away from SUVs and pickup trucks, which the Journal says have accounted for most of the industry's profits in recent years.

CBS News Correspondent Anthony Mason reports from Katrina came to Milwaukee Wednesday, where they woke up to $3 a gallon gas. Residents found that the price at the pump has jumped 30 cents in many cities.

"Who can afford that?!" complained one resident.

  • Stephen Smith

    Stephen Smith is a senior editor for CBSNews.com

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