By November 4, 2016 Read More →

US gas prices climb as Colonial delays gasoline line restart

Gas prices

Colonial Pipeline says its restart of Line 1, the pipeline shut down after an explosion killed one worker and injured five, will be delayed until Sunday. Gas prices in southeastern states have risen due to the shutdown. Reuters photo by Marvin Gentry.

Gas prices up to an average of about $2.24/gallon in Georgia

NEW YORK, Nov 4 (Reuters) – Gas prices in some southeastern states in the U.S. ticked up further on Friday after Colonial Pipeline Co delayed by a day to Sunday the restart of its main gasoline line that was damaged by a fatal explosion in Alabama on Monday.

Retail prices in Georgia, one of the hardest hit by the outage, climbed another 2 cents overnight to average about $2.24 a gallon on Friday, and have risen from $2.18 a week ago, according to motorists advocacy group AAA.

Colonial late Thursday delayed the restart of Line 1, which carries 1.3 million barrels per day of gasoline from the Gulf Coast to the Northeast, to Sunday afternoon from Saturday after installing a new segment of pipe as a permanent fix.

The U.S. Environmental Protection Agency (EPA) issued fuel waivers to 13 states including Alabama, North Carolina and Georgia, as well as the District of Columbia late on Thursday.

The agency had “determined that an extreme and unusual fuel supply circumstance exists that will prevent the distribution of an adequate supply of gasoline to consumers,” it said in a letter to the states.

The waiver allows the sale of conventional grade gasoline in parts of those states that typically need to meet stringent reformulated gasoline (RFG) requirements. It is effective immediately and will continue through Nov. 23, the EPA said.

“These waivers provide meaningful flexibility which will allow our shippers to move additional supply to market which will help mitigate potential supply disruptions,” Colonial said in a notice to shippers on Friday.

Alabama, Georgia and North Carolina have also waived regulations for commercial truck drivers transporting fuel in to order to ensure adequate supply.

The line was initially expected to be back in service by Saturday, but Colonial had warned that was subject to change as it received more information from the site.

Several traders and analysts expect Colonial to move gasoline on its distillate line as repairs continue. Some also expect a waiver to the Jones Act to be issued, which would allow cheaper transportation of fuel from the Gulf Coast to the East Coast via ships. There have not been any requests yet

The line which supplies about 40 per cent of the East Coast’s motor fuel needs, was damaged for the second time in less than two months.

The blast killed one worker and injured five others, when an excavator struck the line, setting off the explosion. Monday’s accident occurred several miles from September’s gasoline spill that interrupted flows on the line for 12 days.

That leak was Colonial’s largest in two decades and squeezed supply in several southeastern states, leading to long lines and price increases at the pump.

(Reporting by Devika Krishna Kumar in New York; Editing by Marguerita Choy)

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