Gasoline prices in many U.S. cities have blown through the inflation-adjusted all-time highs set in 1981 and no relief seems near as oil traders continue to bid crude prices and gasoline futures higher. Sporadic shortages are being reported around the country.
The Bush administration's Wednesday announcement that it was releasing supply from the Strategic Petroleum Reserve slowed the price increase but only for a brief period of time in the afternoon.
Stemming the rise in gasoline prices depends on how quickly electricity can be restored to Gulf Coast pipelines and refineries. Flooding may disable some important refinery equipment for several weeks, extending the down time. The oil companies will need days just to assess the full cope of the damage.
Nevertheless, the gasoline pipelines that supply the Southeast are back online but operating at reduced capacity.
The oil industry is warning that the damage will take time to repair.
Red Cavaney, president of the American Petroleum Institute, which represents the major oil companies, said, "It is becoming increasingly evident that the impact of this devastating storm on oil and natural gas operations will be significant and protracted."
The consumer organization Public Citizen called on Congress to enact price controls.
"In the wake of skyrocketing gasoline and oil prices after Hurricane Katrina -- both as a result of speculation on Wall Street and product shortages -- President Bush and Congress should enact temporary, adjustable price controls to ensure that gasoline and home heating oil prices charged to consumers will be directly tied to costs, not speculation or price-gouging, Public Citizen President Joan Claybrook said.
In an effort to boost gasoline supplies throughout the Southeast, Environmental Protection Agency Administrator Steve Johnson announced that he was relaxing Clean Air Act requirements for motor fuels in the states of Louisiana, Florida, Alabama and Mississippi. The relaxation would allow for the importation or manufacture of dirtier fuels through Sept. 15 in a bid ensure adequate fuel supplies in the Gulf Coast region.
