Ida could affect gasoline for weeks
Amid the damage wreaked upon the Gulf Coast, Ida has taken out an estimated 13% of the country’s refining capacity, according to a statement from auto club AAA. At least four refineries may have shut down operations even before the hurricane hit.
"Until the power is restored, it’s too early to know the full impact of any damage Ida caused on the oil and gas industry," says Jeanette McGee, AAA spokeswoman, in the statement.
Major, destructive storms can have long-lasting effects on gasoline production.
"Typically, a category 4 storm could mean three plus weeks before refineries are back to normal operations, while offshore production is more likely to resume this week,” McGee says.
Patrick De Haan, head of petroleum analysis for Gas Buddy, tweeted that he believes there's a 60% chance gas prices nationwide will rise 10 cents a gallon because of Ida, and a 15% chance they'll go up 25 cents a gallon.
De Haan says it may be weeks before prices go back down.
Highest Labor Day gas prices in years
"Motorists regionally can expect price fluctuations leading into Labor Day weekend," warns AAA's McGee.
Even before Ida, GasBuddy was forecasting that the traditional end-of-the-summer holiday weekend would be the most expensive for gasoline since 2014. Several factors are contributing to this year's higher pump prices.
Crude oil prices haven’t recovered from 2020. To prop up oil prices last year, the OPEC cartel and its allies slashed oil production. They've been slow to boost output again — which has caused crude prices to surge.
Refineries were already struggling. The reduction in driving because of the pandemic forced more than a dozen refineries to close by late 2020, cutting U.S. production by more than 1 billion barrels per day. Then, earlier this year, a cyberattack temporarily shut down the Colonial Pipeline in the eastern U.S.
Americans are getting out. Throughout this summer, AAA has observed that millions more Americans are on the move. The organization doesn’t offer predictions for Labor Day, but it estimated that a record 43.6 million people would make driving trips for the Fourth of July.
Summer gasoline just costs more. The government requires Americans to use cleaner-burning fuel in summer to help lower emissions, and those blends can cost up to 15 cents more per gallon, according to service station trade group NACS.
How to lessen the impact on your wallet
While there’s nothing consumers can do about rising gas prices, you can take a few steps to make room in your budget for the extra expense.
Save on your other car costs. If you haven’t shopped around for a better rate on your auto insurance lately, you might easily be paying hundreds of dollar too much each year. With a little comparison shopping, you can slash your premiums and help offset higher gasoline costs.
Earn a little back from your fill-ups. If you’re destined to pay more at the pump, you may as well have it work in your favor. Sign up for a credit card that helps you build your credit and offers cash back — which is like getting a discount every time you fill your tank.
Save every time you shop online. Next time you're ready to go shopping on the web, stop first and download a free browser add-on that will automatically scour for better prices and coupons as you hit the virtual checkout.
Turn your pennies into a portfolio. It doesn't take much money to earn returns in today’s stratospheric stock market. A popular app allows you to invest in a diversified portfolio using just your "spare change" from everyday purchases.