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Hurricane Ike blows gas prices over $4 mark

Hurricane Ike is hovering on the high side of a category 2 storm, and may reach Cat 3 as it slams Texas in the next few hours, with current winds pushing a storm surge deep into the shoreline of Galveston and other Texas communities. The storm reportedly has winds up to a Cat 4 level several hundred feet above the surface and a storm surge of 20+ feet, enough to inundate 100 miles pf the Texas Coastline.

Customers at one station were limited to 10 gallons per purchase

Ike is also blowing gas prices through the roof as Texas refineries shut down operations for the duration of the storm, and possibly through the clean-up period that follows. Meanwhile, gas stations are cleaning out the wallets of drivers who will find a minute-by-minute escalation of gas prices that seem more like price gouging.

On Friday morning at 9 a.m., Clarksville Online Publisher Bill Larson paid $3.61 a gallon for gas just prior to a trip to Nashville. At the time, his gas station of choice was also limiting customer purchases to 10 gallons per visit, which felt a bit like wartime rationing. Larson and this author, all too familiar with storms, tried valiantly not to think what the day and “Ike” would bring; the reality was culture shock.

102.01 for 25 gallons of regular unleaded
102.01 for 25 gallons of regular unleaded at 10 p.m. at the Madison St. K-Mart

Twelve hours later, back from Nashville, back in Clarksville, Larson and this author spotted a $4.09 gas sign at Kroger’s on Dover Road in Clarksville. That sign prompted us to search the city for escalating prices. What we found was that by 10 p.m., many stations had settled in at the $3.99 rate for regular unleaded, a few topped the psychological barrier of $4 by a penny or two. Then came the gas station at the Madison Street K-Mart, with a hefty $4.17 a gallon lit up in bright neon lights. We circled the K-Mart pumps, and settled on a photo of one pump that showed just over 25 gallons of gas purchased for the staggering sum $102 and change. A second pump on the site showed a $100 tab for gas. That’s a 56 cent, yes, 56 cent increase in 13 hours. It reads a bit like price gouging to us. What’s wrong with this picture?

Bill Larson's Fillup at 9:02am on September 12th, 2008 when gas was a 'cheap $3.61/gal.
Just a memory...Bill Larson's Friday morning fill-up when gas was a mere $3.61/gal.

I had no sooner limped into my home at 11 p.m. last night when the phone rang; my daughter in Paragould, Arkansas, called and in the course of our conversation reported a price of $4.29 per gallon in her small heartland community. Gas sticker shock outweighed and overcame our planned discussion of why Sarah Palin is the scariest VP choice ever.

This story is a “to be continued” piece, since we will be monitoring the price of gas at area stations through the coming week. We have already heard chatter about the next psychological barrier: $5.00 a gallon gas. Will it happen? Maybe. If it does, you’ll be reading about it here.

Send  your comments or pain-at-the-pump gas price “horror” stories and photos to and tell us what this spike in prices is doing to your budget.

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7 COMMENTS

  1. This is just plain scary. Hurricane Ike hadn’t even made landfall and prices are already hiked to unprecedented levels with no justification. Why hasn’t the governor reminded businesses of the state’s anti-goughing laws? These prices will bankrupt the state’s economy in short order.

    Offshore drilling, remember McCain’s declaration on that subject, has not spared us from an inflated availability crisis and apparent speculation.

  2. The price increases are the immediate response to the inability to refine oil, and to get the already produced gasoline out of the refineries. Is this RIGHT? Perhaps, like it or not. There are reserves, however, it is a matter of moving the fuel. Why in the world are all the refineries located on the Gulf coast? And did you know that there are many refineries in Southwest Louisiana, that are not even mentioned, shut down? To answer the first question, this is the price paid by the rest of the nation for the “not in my backyard” attitude. These refineries sustain the majority of the economy in most of the area in which they are located. However, at this time, even those next door to the refineries are in trouble. The very people who may have just lost their homes are the very people who will have to abandon personal responsibilities to make sure the rest of us have fuel. To lead into the answer of the second question, this will take some time. That is all there is to it. Consider the facts that tankers have to be able to get into and out of the region, which at this time, most can not. Even if they could, all systems have to checked before power ca even be restored to fill the tankers. These refineries are huge, and this is a tremendous task in itself. Also, consider that some, if not all of the refineries may have a substantial amount of damage. This is only the beginning. They need people, most of whom are still evacuated and are not allowed to return home, much less to the refineries. Only the most essential personnel are allowed in, due to the tremendous danger. When refineries shut down, due to the process, it takes a while to get everything back online in the very best of circumstances, and they are possibly enduring the very worst at this time. So, while we sit pretty and think of our pocket books, take a moment to realize the full scope of what is going on and for those doing everything they can for the rest of us. This isn’t the oil companies trying to rob us blind as they have been, this is a real and true problem. And I have only given you a small example of what they truly face to get up and running again. If they are producing within a week, I assure you, it will be amazing. This will touch us all, but not as much as those hit by IKE, suffering through the aftermath, having to rebuild their own lives while keeping the rest of us with fuel. How do I know? I have been there and done that, with hurricanes, and working in the refineries, along with much of my family and friends.
    Drill Drill Drill is NOT the answer, obviously!
    Barack Obama stated that our refineries and chemical plants are too exposed.(Not an exact quote) He is absolutely right in many respects. Things have to change in order to ensure this nation doesn’t only depend on one region and one energy source to sustain itself.
    For now, my advice is to conserve your fuel as much as possible. Carpool when you can, and run errands in one trip as much as possible.
    Please give to the American Red Cross and/or other reputable organizations. When you help them, you help all of us.

  3. However the shutting down of the refineries has no affect on the price of the gasoline already in the gas stations tanks, and as such raising the price as a result of a natural disaster such as a hurricane is the text book definition of price gouging and should be severely prosecuted by both federal and state governments.

    We are seeing a Enron style manipulation of the commodities market of the world through speculation by pension funds, hedge funds, and other corporate investors. Just look at the increases in prices which directly parallel the increases in the electrical market in California during the height of the Enron energy scam. It’s time to require a company to be able to manufacture a product from a purchased commodity before allowing a organization or group to purchase commodity options and contracts.

    There have been studies which have pointed out that if institutional investing in the commodities markets was banned that the price of oil would drop by 50% immediately that my dear is price gouging. It’s time to re-regulate the commodities markets.

    These artificially inflated prices are starting to have a serious affect on the financial stability of normal every day families who are fiscally responsible.

    What will happen is people are suddenly unable to pay their bills, and when that happens the economy will undergo a massive contraction. One which has the potential to hit much harder and faster than the great depression did in the 1930’s. All it takes is for prices to keep rising while wages remain stagnant. Get ready because it’s coming.

  4. You are correct! Absolutely. I have to correct myself in the matter that ALL refineries are located in that area. There are refineries in other locations. I stated “The price increases are the immediate response to the inability to refine oil, and to get the already produced gasoline out of the refineries. Is this RIGHT? Perhaps, like it or not” in hopes of stimulating aspects of this conversation because there are those who will attempt to argue this point. The “perhaps, like it or not” I actually changed from “No, I don’t think so.” I am very happy with your response. I hope to bring more attention to this, especially since prior to either hurricane, oil prices fell, yet gas prices did not follow suit as they should have. During this time, the refineries were up and running. So, as to that, I beg a new question. Why did it take hurricanes to bring this to the full attention of the federal government? I am aware this question was asked in some areas prior to the storms, however, it seemed as though things were not in full perspective. It appears as gouging was already occurring, for a very long time! Where will the government actually draw the line?

    I sincerely hope my attempt to bring forth conversation does not distract from the entirety of my post, because there is more to this than gas prices. These people are in need, and I sincerely hope everyone will take notice, and do what they can to help the organizations on the ground.

    Yes, we are all in economic hardship. (We barely make it paycheck to paycheck.) However, I will find a way to do something, anything, to contribute what I can. Every little bit helps. Reach out and help, after all, it is the American way, and I believe we should feel a moral obligation to do so.

    I hope you read the post in its entirety, because while it involves refineries, its about those who are in very stressful circumstances doing all they can. This is the human aspect.

  5. I am getting reports that the SWLA refineries are in much better condition than initially expected. What that means exactly, I can not answer. I do know essential staff are on what is called “lock-down” in some, if not all of the SWLA refineries. I do not have information coming in yet about the Texas refineries. Lock-down means personnel are present on the premises 24 hours a day and are not allowed to leave the plant. It takes a week to get a plant up and running in the best of circumstances. These people will be in the plants until everything is at full capacity.

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