Drivers empty US petrol stations in response to fuel pipeline hack


Panic-buying by motorists in response to a cyber attack on an interstate fuel pipeline has led to petrol stations scattered around the US south-east running out of stock, while the federal government suspended pollution rules to maintain the flow of energy.

The Colonial pipeline has been shut since Friday after what the Federal Bureau of Investigation said was a ransom attack by a hacking group called DarkSide. The 5,500-mile network delivers petrol, diesel and jet fuel from refineries on the Gulf of Mexico to markets on the US east coast.

Drivers worried about potential shortages have been filling up their cars. Almost 8 per cent of stations in Virginia had run out of petrol as of Tuesday morning, according to fuel data provider GasBuddy, while about 6 per cent of stations in North Carolina and 4 per cent of stations in Georgia had also run dry.

“Motorists in some cases are starting to hoard gasoline supply, leading to stations running low or out faster than they would have, making a larger impact for the days ahead,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

The pipeline company has said it expected most of the system to be back in operation by the end of the week. US gasoline futures for June delivery have largely held steady since the shutdown began as traders bank on supplies returning to normal.

However, prices at the pump have begun to rise sharply. Average national gasoline prices reached $2.99 a gallon on Tuesday morning, according to AAA, a motorist association, the highest level since November 2014.

READ  Ocado boss says 70,000 workers required to stop food rotting in fields

States in the US south-east remained among the cheapest markets for petrol, according to AAA, but prices are also increasing there.

As of April 30, the US south-east had 23.8m barrels of petrol in storage, 9 per cent less than average, according to the US Energy Information Administration. Fuel wholesalers can draw down those stocks until service on the pipeline, which carries 45 per cent of the fuel consumed on the east coast, is restored.

However, there has been “in many cases two or three times normal demand” as consumers react to the disruption, said Jeff Lenard, vice-president for strategic industry initiatives at NACS, a convenience store trade association. “People are concerned about where their next fill will come from so they’re making sure they get it today.”

To address fuel shortages, the US environmental regulator on Tuesday temporarily waived certain restrictions on the vapour pressure of petrol sold in Maryland, Pennsylvania and Virginia, plus Washington, DC. The controls are normally in place to curb smog.

“I have determined that an ‘extreme and unusual fuel supply circumstance’ exists that will prevent the distribution of an adequate supply of compliant gasoline to consumers,” Michael Regan, administrator of the US Environmental Protection Agency, wrote.

The US Department of Transportation said it was looking into exempting shippers from the Jones Act, a law that requires US-flagged vessels on routes between American ports, which would enable foreign tankers to ferry fuel between the Gulf coast and the eastern seaboard.

The agency had already enacted emergency powers to lift limits on the number of hours truckers could work in order to increase deliveries of fuel by road. It expanded this exemption to an 18th state on Tuesday.

Analysts said the Biden administration’s moves did not signal a swift reopening of the pipeline.

“If they waive the Jones Act it could be an indication that the situation could drag on and not be temporary as the market is currently expecting,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here