Fears of gas shortages lead to long lines at pumps, rising prices after cyberattack targets pipeline

U.S.

CHAMBLEE, Georgia (NewsNation Now) — Officials say they’re taking steps to stave off potential gas shortages as the shutdown of the largest U.S. fuel pipeline entered into its fifth day Tuesday, as drivers across the country flock to gas stations.

Long lines started forming at gas pumps across the country Tuesday, although no widespread disruptions were evident.

The Colonial Pipeline, which delivers about 45% of the fuel consumed on the East Coast, was hit by a cyberattack Friday. Ransomware attacks are typically carried out by criminal hackers who scramble data to paralyze their target’s networks and demand large payments to decrypt it.

There were reports of gas stations in the Southeast running out of gasoline, according to Gasbuddy.com, which tracks outages and prices. In Virginia, 7.5% of the state’s 3,880 gas stations reported running out of fuel. In North Carolina, 5.4% of 5,372 stations were out, the company said.

By Tuesday, more than 1,000 gas stations had run out of gasoline, shortages primarily driven by panic buying.

“A lot of that is because they’re selling three or four times as much gasoline that they normally sell in a given day, because people do panic,” said Tom Kloza, a veteran analyst with S&P’s Oil Price Information Service. “It becomes a self-fulfilling prophecy.”

A company that operates a major U.S. energy pipeline says it was forced to temporarily halt all pipeline operations following a cybersecurity attack.

The states most dependent on the pipeline include Alabama, Georgia, Tennessee and the Carolinas, he said.

Secretary of Energy Jennifer Granholm told reporters Tuesday that a large part of the pipeline resumed operations manually late Monday, and Colonial will be able restart most of its operations by the end of the week. Motorists may still feel a crunch because it takes a few days to ramp up operations, she said.

“We know that we have gasoline, we just have to get it to the right places,” Granholm said.

Granholm urged people not to hoard gasoline saying there is no need, and she warned gas station owners as well.

“We will have no tolerance for price gauging,” Granholm said.

There is action at the state level as well. On Tuesday, Virginia Gov. Ralph Northam declared a state of emergency after the cyberattack.

“This emergency declaration will help the Commonwealth prepare for any potential supply shortages and ensure Virginia motorists have access to fuel as we respond to this evolving situation,” Northam said.

Northam’s declaration comes a day after North Carolina Gov. Roy Cooper issued a state of emergency allowing for fuel transportation waivers.

Georgia Gov. Brian Kemp suspended state taxes on motor fuels through Saturday. Georgia collects a gasoline tax of 28.7 cents per gallon and a diesel tax of 32.2 cents per gallon.

“It will probably help level the price at the pump off for a little while,” Kemp told reporters at DeKalb-Peachtree Airport in Chamblee, an Atlanta suburb.

However, Kemp also urged people not to hoard gasoline, saying he expected the situation to be resolved soon.

“You don’t need to go out and fill up every 5-gallon can you’ve got,” Kemp said.

Scattered gas stations in metro Atlanta were out of fuel Monday and Tuesday, but most were operating normally. In Georgia, nearly 4% of 6,368 stations had run out of fuel, Gasbuddy.com said.

In Florida, just 2% of the gas stations had run out of fuel. Nevertheless, consumers in some areas faced long lines.

“It’s been crazy,” Danielle Charles said. “This is worse than a hurricane.” Long lines at the gas pumps are a typical occurrence during hurricane season.

In addition, lines started forming at South Carolina stations from Marion and Mullins to Myrtle Beach, NewsNation affiliate WBTW reported.

Citgo’s Fairfax, Virginia terminal ran out of premium grade reformulated gasoline and its Richmond, Virginia terminal was out of unleaded regular, according to the American Automobile Association, citing a shipper bulletin.

The Colonial Pipeline carries jet fuel as well, and planes at the busy suburban airport where Kemp spoke Tuesday were being fueled and taking off.

American Airlines rerouted two long-haul flights from Charlotte due to possible fuel shortages but said the overall impact has been minimal. Passengers flying to Honolulu will have to change planes in Dallas, and those heading to London will stop in Boston to refuel.

To help alleviate potential shortages, the Environmental Protection Agency waved some fuel quality requirements on an emergency basis in parts of Washington D.C., Maryland, Pennsylvania and Virginia.

Richard Joswick, head of global oil analytics at S&P Global Platts, said despite the long lines, there is no imminent fuel shortage and, thus, no need to panic-buy gasoline. In addition, Colonial Pipeline said it’s likely to restore service on the majority of its pipeline by Friday. If that happens, there won’t be much of an issue.

“If it does drag on for two weeks, it’s a problem,” Joswick added. “You’d wind up with price spikes and probably some service stations getting low on supply. And panic-buying just makes it worse.”

Other experts said if the pipeline is not up and running in the next 24 hours, we could start to see a 10-, 20-, or even 30-cent increase in gas prices.

The average U.S. price of regular-grade gasoline jumped 6 cents over the past two weeks to $3.02 per gallon, according to AAA.

Reuters reported Tuesday that gas prices rose to their highest in over six years, and Georgia suspended its sales tax on gas until Saturday.

Florida Commissioner of Agriculture and Consumer Services Nikki Fried also cited the pipeline attack as the reason for the long lines as well as a lack of truck drivers to move the fuel to gas stations, something that some in the industry are predicting could cause a fuel shortage come summer.

Yet, Fried also cautions against panic-buying. “Don’t panic to buy gas,” she said. “Don’t hoard gas and don’t form long lines at gas stations. … Fuel is continuing to move around our state.”

The Associated Press and Nexstar Media Wire contributed to this report.

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