Why Hurricane Harvey Is Causing Gas Prices to Spike In Your State

Hurricane Harvey, which has caused widespread flooding and forced the closure of eight refineries in Texas, pushed the average price of gas in the U.S. up 10 cents from the previous week to $2.45 a gallon, according to new information posted by AAA.

The latest update from AAA shows a more than five-cent jump in the national average in just the past few days.

On Monday, the U.S. Energy Information Administration’s reported the U.S. average retail gasoline price was $2.40 per gallon, a four-cent increase from the previous week and up 16 cents from the same time last year. It’s worth noting that this is still the second-lowest price on the Monday before Labor Day since 2004, and the country is nowhere near those heady days in 2008 when the average price for a gallon of gas reached a record $4.11.

However, these prices do not yet reflect the full effects of Hurricane Harvey, the EIA cautioned.

There have already been reports of gas prices in Texas more than doubling, and in at least one case reaching $8 a gallon. North Texas has been particularly impacted by gas shortages, according to reports. But the storm’s effect on oil and gas infrastructure on the Texas Gulf Coast—an area that houses 25% of the nation’s refineries—is rippling throughout the U.S.

In other words, gas prices will continue to creep higher and some of the steepest gains might not be in Texas.

The U.S. Gulf Coast, an area that includes the states from Texas to Florida, tends to have the lowest retail gasoline prices in the country because it is home to about 50% of U.S. refining capacity and produces more gasoline than it consumes. Meanwhile, the West Coast typically sees gas prices above the U.S. average because of its isolation from supply sources. Prices are also higher in these West Coast states because of higher taxes and stricter environmental regulations that require a special blend of gas.

About 25% of oil refining capacity, or about 2.5 million barrels a day, in the Gulf Coast has been taken offline thanks to Hurricane Harvey, according to Oil Price Information Service.

The EPA has taken steps to prevent supplies from tightening by temporarily removing regulations that require oil companies to use low-volatility gasoline during the summer to help prevent ozone pollution. On Wednesday, EPA Chief Scott Pruitt expanded an emergency waiver of Clean Air Act restrictions on motor fuel requirements to 12 states, including Texas through Sept. 15.

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