Harvey drives up gas prices for Labor Day weekend

A backyard barbecue may be gentler on the budget than a weekend road trip this Labor Day as the aftermath of Hurricane Harvey continues to jack up gas prices in Illinois and elsewhere.

The average price for a gallon of gas in the state jumped up to $2.54 on Friday, 4 cents higher than Thursday's average and about 13 cents higher than a week ago, before Harvey made its first landfall. Gas prices in the Chicago metro area saw a 3-cent increase from Thursday, up to $2.65 on Friday. That was a 9-cent increase from a week earlier.

"What we're seeing is a reflection not only of Labor Day demand but, more to the point, the effects of the hurricane in the Gulf Coast region," said Beth Mosher, a spokeswoman for AAA Chicago.

Harvey made its first landfall in oil refinery-rich Texas late on Aug. 25 as a Category 4 hurricane and left devastation in its wake. The storm did a U-turn in the Gulf of Mexico and hit southwestern Louisiana as a tropical storm. Though rain in inundated Houston has finally let up, some predict years of cleanup lie ahead.

The Explorer Pipeline in Texas, which transports oil from the Gulf Coast to the Midwest, shut down at least one of its lines earlier this week. While that was putting pressure on the area, Mosher said, it's expected to come back online this weekend.

It "doesn't mean prices are going to resume back to normal, but it's a step in the right direction," she said.

As of Friday, about one-fifth of oil refining capacity in the Gulf Coast was offline, Mosher said. And the full extent of damage done to refineries isn't yet known.

But none of that means there is a supply shortage — that's not the case anywhere in the U.S., Mosher said. Inventory levels across the U.S. have been strong all summer.

Other parts of the country, like the East Coast, are seeing higher prices as they send oil and gas down to Florida, Mosher said. Dallas is getting gasoline and diesel from Oklahoma, and Europe is even shipping in fuel.

So why is there such an increase in gas prices in Chicago?

"Fear," Mosher said.

The Chicago market, home to three of its own refineries, is typically jittery, she said. This is expected to be a short-term spike.

"This is not a situation that calls for panic," Mosher said. "But prices have risen and may continue to rise. We do think that prices will begin to drop again by mid-to-late September, when refineries should be back online."

The increase so far this week isn't a big deal, customer Marcus Combs said as he pumped gas Thursday afternoon at a BP station in the River North neighborhood. As long as gas doesn't surpass $4 a gallon again, everything will be fine, he said.

"I'm not panicking about gas prices," Combs said.

People already expected higher prices heading into Labor Day, said Ben Kaleta, owner of a Marathon Gas station in Arlington Heights.

"It's been that way since I was a kid," he said. "It always went up right before the holiday, during the holiday, and then at the end of the holiday, everything went back down to normal."

Kaleta said his customers have teased him about the higher prices around holidays, insinuating he hiked them to pay for a weekend boat outing.

"They go, 'Hey Ben, I see the holiday's coming, you need more gas for your boat,'" he said, laughing. "They got me all figured out."

Though there's no trend indicating gas prices tend to increase over Labor Day, Mosher said, higher summer prices typically linger through the three-day weekend, often considered the last hurrah of the season.

A gallon of gas in Illinois cost an average of $2.33 a year ago — 21 cents cheaper than Friday's average. The average price in the Chicago metro area a year ago was 19 cents lower.

Illinois' average price Friday was about 2 cents higher than the national average of $2.52. The national average Friday was up about 7 cents from Thursday and up about 30 cents from a year ago.

Radio broadcasts have been keeping Angela McDonald updated on Harvey's impacts as she drives for Uber, she said Thursday, pumping gas into her Toyota Corolla at the BP.

"If prices are going to go up because of Harvey and also because of the holiday, it's definitely going to have an impact on my income," she said.

A few pumps down, Elias Delossantos was filling up a Beggars Pizza delivery van. Fearing Harvey would drive prices even higher, he wanted to get gas before the weekend, he said.

A gallon of regular was $2.89.

"It's too expensive for me," he said.

amarotti@chicagotribune.com

Twitter @AllyMarotti

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