Gas prices are on the rise ahead of Labor Day weekend due to the damage caused by Hurricane Harvey.
It has now dwindled down to a tropical storm that is quickly fading, but the intense rains and winds caused by the storm forced three oil refineries in the state of Texas to shut down. As a result, gas prices have surged as Labor Day weekend approaches.
The three refineries hold more than 10% of the nation’s total oil output capacity. Gas futures have soared more than 15%, but prices at your local gas pump have remained mostly unchanged so far, climbing close to 3% over the last week.
According to AAA, the current average price of a gallon of gas in the country is around $2.40 for regular. Since Friday afternoon, gas futures have been hiked 13% before Harvey stopped a large chunk of the nation’s ability to produce gas and jet fuel.
“Retailers can either go out of business or pass their costs along,” said Tom Kloza, director of global energy analysis at the Oil Price Information Service. Gas pumps will have to raise the prices of regular as a response to what’s happening.
Harvey recently moved further East, hitting areas in Louisiana near the coast, along the Texas border. It is unclear how much damage the hurricane will cost in relief efforts.
