Gas prices are surging in the Southeast. Here’s why (and why not)

National average gas prices could soon reach a 6-and-a-half year high. The reasons why might not be what you expect.

There’s been a lot of information flying around for the last several months about gasoline supplies in the Southeast, starting from when the region first saw a price spike in February after a blizzard shut down refineries across Texas and Louisiana.

We gathered up information about what is, and isn’t, causing gas prices to rise in the region ranging from Louisiana to North Carolina.

Do you have a question we missed? Email ckaracostas@thesunnews.com, and we’ll do our best to get your question answered.

What is increasing prices

Russian criminal group hacks and shuts down Colonial Pipeline

The Colonial Pipeline spans from a refinery in Houston, Texas, all the way to New Jersey. On the way, it passes through Louisiana, Mississippi, Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland and Pennsylvania.

The states of most concern are North Carolina, South Carolina, Tennessee, Georgia and southern Virginia because as the “spurs” of the pipeline, they receive around 70% of their fuel supplies from the Colonial Pipeline system, the federal Energy Department said Tuesday.

The pipeline shut down Friday and has resumed limited operations between Maryland and New Jersey, but the source of the pipeline, in Texas, is still closed. The company said it hopes to be more completely operational by Friday.

Because this pipeline feeds so much of the Southeast’s fuel supplies, gas prices have started to rise in advance of fears that there could be a shortage if Colonial stays shut down for more than a few days.

Increased demand outpacing supply

For months, vaccines have become more available, people have tired of staying at home and travel has been quickly increasing. People are heading (and driving) to the beach. Airlines have been booking more flights. All of this has used up more gasoline.

Increased demand should mean increased supply, right? The West Texas oil boom did lead to some of the lowest prices in a generation in the late 2010s.

Well, when the pandemic began, demand for gas evaporated. The world had an “oil glut” because there was a lot of oil being produced and no one using it, NPR reported last year. At one point, companies were scrambling to find a place to store all of the oil, including in warehouses, on giant tankers, anywhere they could put it.

Eventually, the Organization of the Petroleum Exporting Countries (OPEC), which controls much of the world’s oil output, put drastic reductions of oil production in place.

However, even though demand for gasoline has started to rise again, particularly in the U.S., OPEC has not yet started increasing oil production to pre-pandemic levels, NPR reports. That has meant prices have quickly risen since about January for an increasingly hot commodity: oil.

What isn’t increasing prices

The gas tax.

The federal gas tax has not been raised since 1993. The tax is 18.4 cents per gallon of regular gasoline. There are also no plans to raise it, Reuters reported. President Joe Biden even told lawmakers in a recent meeting that it would raise too little money to be worthwhile to raise.

Georgia even suspended its gas tax through Saturday amid the Colonial Pipeline emergency, the Atlanta Journal-Constitution reported. It’s also the only state fed by the Colonial Pipeline that has increased its gas tax so far this year.

Here are the gas taxes in the states affected by a fuel crunch right now.

• Georgia: 28.7 cents with local taxes where applicable (increased in January from 27.9 cents in 2020)

• North Carolina: 36.1 cents (rate since 2019, when it declined 0.1 cent)

• South Carolina: 24 cents with a 2 cent increase coming this July

• Tennessee: 27.4 cents since 2019 (increased from 21.4 cents in 2017)

• Virginia: 21.2 cents since July 2020 (increased from 16.2 cents)

Blocking of Keystone XL Pipeline

This was an expansion of the existing keystone system. Blocking it likely keeps oil and gas supplies, and therefore prices, as is, PolitiFact reported.

President Biden’s fracking limits

At the start of his presidency, Biden imposed a 60-day ban on new oil and gas leases on federal lands. Some accused him of “banning fracking,” the process by which natural gas can be mined from underground. That is not true, CNN reports.

As for the initial 60-day ban, it expired March 21.

Why are Texas and Louisiana or East Coast states like Maryland and New Jersey not affected? The pipeline touches them.

Those states have greater diversity of fuel supplies than North and South Carolina and other states. States outside of the core of the Southeast have other companies, other sources of fuel and other refineries feeding them, the Energy Department said Wednesday.