Gas surges to $5 a gallon in Ike’s wake

HOUSTON (AP) —

Fears of supply shortages and actual fuel-production disruptions resulting from Ike’s lashing of vital energy infrastructure led to pump-price disparities of as much as $1 a gallon in some states, and even on some blocks.

Late Saturday, the U.S. Minerals Management Service said there were two confirmed reports of drilling rigs adrift in the central Gulf of Mexico.

Compounding the jitters and higher costs for gasoline retailers was the fact that some big refineries along the Gulf Coast had been shut for nearly two weeks following Hurricane Gustav. Power outages caused by Ike threatened to keep millions of gallons of gasoline output idled for at least several days.

The price of regular gasoline soared as high as $4.99 a gallon in Knoxville, Tenn. on Saturday, up from $3.66 a day earlier.

In Florida, the attorney general’s office reported prices as high as $5.50 a gallon in Tallahassee and said it had received 186 gouging complaints.

Gov. Charles Crist said on Friday that $5 a gallon “can only be described as unconscionable” and added: “Raising rates to exorbitant levels like this only causes unnecessary panic and fear. This type of behavior will not be tolerated.”

In Connecticut, AAA said average prices jumped 10 cents overnight, and Attorney General Richard Blumenthal said his office had received complaints of stations charging more than they advertised, raising prices more than twice in a single day, and other problems.

“A lot of it is simply incredible,” Mr. Blumenthal said, “and a lot of the price increases make no sense economically in terms of supply and demand.”

Prices in California on Saturday ranged from $3.49 to $4.39 per gallon. In the eastern suburbs of Cleveland, gasoline jumped from $3.55 early in the week to $3.79. Regular gasoline at Chicago-area stations averaged $4.12 a gallon.

The price jumps came after the wholesale price of gasoline soared to $4.85 a gallon Friday in anticipation of Ike’s arrival.

Many stations have contracts to buy gas from suppliers based on prices set by those markets, said Tom Kloza, chief oil analyst with the Oil Price Information Service.

“They aren’t gouging; they are simply passing along the wholesale cost,” he said. However, a small percentage of stations owned by major oil companies are somewhat insulated from these forces, enabling them to keep prices lower.

In Knoxville, account executive Sharon Cawood said, “One of our local gasoline chains called a local TV station Thursday, sometime during the day and said: ‘We’re running out of gas. We’re going up 80 cents a gallon… . It caused a major scare.

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