Think you dodged Hurricane Ike?
Maybe not completely. The wholesale price for gasoline produced on the Gulf Coast skyrocketed Thursday as the storm churned toward Texas' massive petroleum refineries.
The wholesale price per gallon rose about $1 to $4.25, topping the high price five years ago when hurricanes Katrina and Rita raked the Gulf Coast, said Tom Kloza, publisher of the Oil Price Information Service in Wall, N.J.
"It's pure panic," he said.
Wholesale prices are what refineries charge retailers. Retailers then mark up those prices for the customer to make a profit — so if these wholesale prices hold, it could mean that pump prices for U.S. drivers easily break through the July 17 record of $4.114 a gallon.
"We're looking at the highest wholesale prices ever for a huge swath of the country," Kloza said. "People understand that regardless of what happens with Ike, it's going to shut down the biggest refining cluster for a period of five, six, seven days."
The spike will almost certainly lead to high pump prices for consumers as the gasoline makes it way from the wholesale market to retailers.
The question is how high and how fast.
So far, gas stations around Tampa Bay say they haven't raised their prices. Information from the AAA shows that the price of unleaded gasoline on Thursday averaged $3.62, a little lower than Wednesday's going rate.
Dave Mica, executive director of the lobbying group the Florida Petroleum Council, said Florida is advantaged because it receives gas by tanker and barge, rather than pipeline. During catastrophes in the Gulf of Mexico, Florida can receive gas from other areas through its ports.
But Jim Smith, president of the Florida Petroleum Marketers and Convenience Store Association, said he didn't think higher prices would last.
Smith predicted a temporary 50-cent increase that happens gradually as gas stations have to buy higher-priced product.
"The fundamentals aren't there to support a higher price," Smith said. "What we're seeing is just an overreaction to the situation with Ike."
Ike, following last week's Hurricane Gustav, was expected to blow ashore late today or early Saturday somewhere between Corpus Christi and Houston.
Texas is home to 26 refineries that account for one-fourth of U.S. refining capacity, and most are clustered along the Gulf Coast in places such as Houston, Port Arthur and Corpus Christi.
Exxon Mobil Corp.'s plant in Baytown, outside Houston, is the nation's largest refinery.
Refineries are built to withstand high winds, but flooding can disrupt operations and — as happened in Louisiana after Gustav — power outages can shut down equipment for days or weeks.
"This is about refineries in the target of the storm," Kloza said. "This is about refineries having to shut down for probably five, six, seven days even if the storm misses them."
Up to now, neither Ike nor Hurricane Gustav, which struck Louisiana earlier this month, have caused a significant increase in gasoline prices.
The average national retail price of a gallon of regular unleaded gasoline was at $3.671 on Thursday, up a couple of cents in the past two days, according to auto club AAA, the Oil Price Information Service and Wright Express.
Kloza noted there's no guarantee wholesale prices will remain at the levels of Thursday morning, not even for the day.
"It could be $5 a gallon at the end of the day or it could be $3 a gallon," he said.
There is, however, some potential good news.
Crude oil on the futures market sank below $101 a barrel to its lowest settlement price since late March — a sign that investors are still worried about waning global demand.
"It's a strange, strange world here," Kloza said. "You might see an extraordinary thing — you may see crude oil less than $100 and retail gasoline more than $4 a gallon."