Motorists from Maine to Florida will soon feel the wrath of Hurricane Harvey without seeing a single raindrop.
Fuel prices at the pump are likely to climb after Colonial Pipeline, the largest U.S. gasoline conduit, was forced shut its main diesel line late Wednesday and planned to halt its gasoline line Thursday because about half of Gulf Coast refining capacity was offline. Valero Energy Corp. and Royal Dutch Shell Plc, both major Gulf Coast refiners, told wholesale customers Wednesday they don’t have enough gasoline and diesel to sell retail suppliers.
Hurricane Harvey has potentially cut U.S. fuel-making capacity to the lowest level since 2008 after its initial strike on the Texas coast late last week. As Tropical Storm Harvey hit southeast Louisiana on Wednesday, it brought torrential rains that shut the biggest U.S. refinery, owned by Motiva Enterprises in Port Arthur, Texas, and one nearby held by Total SA. They join more than 12 other plants with almost a quarter of U.S. refining capacity.
As refineries turned off the lights, pump stations and terminals were also submerged by Harvey’s days-long deluge, and operators such as Valero and Shell had no choice but to stop sending fuels. Colonial, which carries fuel from Gulf Coast refineries to the East Coast, indicated Wednesday that many smaller lines branching off from its main artery will shut in addition to its two main Lines 1 and 2.
Valero stopped supplying gasoline stations across the Northeast at stores that don’t carry its logo, while Shell reduced supplies to some company-branded stations in the lower Atlantic, according to people familiar with the operations of both companies who asked not to be identified. Motiva Enterprises holds exclusive rights to distribute Shell fuels to the majority of the southeast, said Natalie Gunnell, a spokeswoman for Shell’s U.S. products unit.
BP Plc was said to be moving a tanker authorized to carry fuels between U.S. ports to Florida from New York Harbor, according to a person familiar with the cargo.
Spokespeople from Valero and BP didn’t return requests for comment.