Average gasoline prices in Maine are up 32 cents over the past week, rising another 3 cents a gallon on Tuesday, and the Maine attorney general is on the lookout for any price gouging.
The prices are rising amid uncertainty as to whether the post-Hurricane Harvey run-up will soon hit a high point. Average prices reached above $2.71 for regular grade, according to surveys from both AAA and GasBuddy, a rise of roughly 32 cents a gallon over a week ago.
That price and rate of increase compare with the national average of $2.64 a gallon, and a 23.8 cent hike rise over last week, according to gasoline price website GasBuddy.com.
Prices are rising in Maine and New England faster than the national average, according to GasBuddy, because supplies normally earmarked for the Northeast have been diverted south, to ease severe shortages there.
Maine Attorney General Janet Mills said the state has not received any complaints of price gouging, but is monitoring the situation.
Markets and analysts were sending mixed messages on Tuesday about what might happen next.
On one hand, the restart of the Houston-area segment of the Colonial Pipeline, which moves 3 million gallons a day of fuel from Gulf Coast refineries to the Northeast, was expected to ease supply shortages that contributed to the price jump. The wholesale price that commodities traders were paying for future delivery fell Tuesday on the New York Mercantile Exchange, as more Texas refineries came back on line and the summer driving season tapered off after Labor Day.
But Patrick DeHaan, senior petroleum analyst for GasBuddy, said Maine might see prices rise another dime or so before they stabilize and start to drop next week.
“I think the biggest increases are behind you,” DeHaan told the Portland Press Herald.
DeHaan and others also are watching the path of Hurricane Irma, which could hit Florida and the Southeast this weekend and disrupt East Coast shipping and fuel deliveries.
“It’s likely prices will increase in the coming days due to Harvey aftermath, but also due to Irma’s uncertainty,” said Dan Goodman, public affairs manager for AAA Northern New England.
While the focus has been on gasoline from the Gulf, Maine and New England have been partially insulated from supply problems because the region’s largest share of fuel comes from Canada.
Irving Oil’s refinery in Saint John, New Brunswick, is the largest in Canada. It produces 300,000 barrels a day of gasoline, heating oil and jet fuel, exporting half of it to the Northeast through terminals that include Searsport, Portland and Portsmouth, New Hampshire. The company doesn’t publicly release shipping information, but has in the past estimated that three out of five vehicles in Boston run on Irving gasoline. Four years ago, the New England Petroleum Council said 70 percent of Maine’s gasoline comes from the Saint John refinery.
But Maine also receives gasoline from refineries in New Jersey and Philadelphia, and some was diverted south last week to help regions hard hit by the supply disruption in Texas. That action has led to prices rising at a higher rate in New England, according to DeHaan, because it had the effect of tightening supplies.
“Instead of supplying the Northeast,” he said, “quite a bit is going to Florida and south.”
DeHaan said that despite its location, even Irving has had a financial incentive to ship gasoline past its dominate Northeast market.
“Irving is also incentivized because prices are rising so much,” he said.
Jamie Py, executive director of the Maine Energy Marketers Association, noted that prices at the pump reflect a wider, wholesale market, not New England.
“The good news is we have a lot of supply close by,” he said. “But retail prices are set by what’s going on along the East Coast and New York Harbor.”
Retail prices, however, appear to be staying in a competitive range. Py said the local market helps keep price spikes in check.
“There’s street competition,” he said. “Gas stations have big signs. Consumers like to save a couple of cents, and there are a lot of stations around.”
Goodman said AAA has not received any reports of price gouging. State officials say they’re watching to make sure that doesn’t occur.
“A price increase in and of itself does not constitute price gouging as defined by law,” said Maine Attorney General Mills. “However, our office will monitor the situation to determine whether any unconscionable price changes occur other than as a result of Hurricane Harvey.”
Last week Energy Secretary Rick Perry said he was going to instruct all U.S attorneys general to be on the lookout for price gouging.
It appears the impact on gas prices has not been reflected in No. 2 heating oil, which on Tuesday had several companies offering fuel for $1.99 a gallon — the same price as a month ago.
At Rinaldi Energy, a busy gas station in Saco that was charging $2.69 for regular on Tuesday, a sales associate said his company was hopeful that wholesale prices would begin falling. Dimitri Skinsocas said he was unsure when the next delivery was scheduled, but he was watching developments on both energy markets and the weather.
“We do our best to keep it as low as possible,” said Dimitri Skinsacos. “But we’re obligated to correlate with the market. We have no control over that.”
By: Tux Turkel (Press Herald).
Photo: UPI.
Review: Emerging Market Formulations & Research Unit, Flagship Records.