Gasoline prices spike to the highest point since 2014 in the wake of pipeline hack

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Gasoline prices have skyrocketed in the wake of the Colonial Pipeline hack, hitting the highest point since 2014.

The American Automobile Association estimates that the average price for a gallon of gasoline nationwide is more than $3. Prices have steadily climbed since November 2020, when the cost was $2.13 per gallon on average throughout most of the country.

Although fuel prices have yet to reach the high of the late 2000s — when motorists were forced to shell out more than $4 for a gallon of fuel — the current costs are the highest since early 2014.

“Last year, gas prices were so low. Now, people are looking at the gas prices today and it feels like a sticker shock,” said Molly Hart, an AAA spokesperson.

The spike in prices comes amid a ransomware attack on Colonial Pipeline, the nation’s largest pipeline refinery system. The hack has crippled the company’s ability to deliver gasoline to much of the East Coast, where it accounts for 45% of all fuel consumed.

Colonial Pipeline’s inability to transport gasoline, combined with spiking demand caused by fear, has led to long lines at the pump and gas shortages.

The impact has been felt disproportionately in the mid-Atlantic and South. On Thursday, 73% of gasoline stations in Washington, D.C., had run dry. In North Carolina, the figure stood at 68%.

Similarly, nearly half of all gasoline stations in Georgia and South Carolina have run out of fuel.

Even though Colonial Pipeline has resumed its operation, gas shortages and rising prices are unlikely to be alleviated immediately.

“We will not feel the effects at the pump immediately. This is not like flipping on a light switch,” President Biden said. “There might be some hiccups along the way here.”

Experts agree, pointing to the fact that gasoline prices were spiking even before the Colonial Pipeline crisis.

Since last year, fuel prices have steadily jumped because demand for oil and gas is increasing after a lull caused by COVID-19. While demand has grown, supply has decreased. Domestic and foreign oil production remains lower than at any other time in recent years.

At the same time, U.S. oil wells and refineries are idle. Since the start of the coronavirus outbreak, more than 120,000 energy jobs have been lost because of decreased demand for oil and gas.

In Texas, alone, nearly 60,000 energy industry jobs were lost in 2020. With refineries shuttered and half-staffed, some energy companies are struggling to meet rebounding demand.

Republican lawmakers argue the White House is not doing enough to spur domestic energy production.

One of Mr. Biden’s first moves in office was to revoke permits for the Keystone XL Pipeline, which would have carried 800,000 barrels of oil per day from Canada to refineries on the Gulf Coast.

The Interior Department has also issued a moratorium on new oil and gas drilling on federal lands.

“Skyrocketing [gasoline] prices are just the beginning of what’s to come with [Democratic] policies aimed at destroying the oil and gas industry,” said GOP Rep. Jodey Arrington of Texas. “Working families will feel the greatest pain.”

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