Colonial Pipeline, the largest U.S. fuel pipeline company, has been hit by a cyber attack. The FBI confirmed the hacker behind it on May 10.
Parts of Coloniald, the largest gasoline pipeline in the U.S., remain closed due to the hack, and gasoline prices in the U.S. could rise to their highest level since 2014.
The nationwide average gasoline price rose to $2.985 per gallon Tuesday (May 11), up 6 cents from last week. If it rises another 3 cents, the national average gas price will reach its highest level since November 2014.
A statement from the American Automobile Association (AAA) said gas prices are expected to climb this week because of the Colonial Pipeline shutdown; and the longer the pipeline is closed, the greater the impact on gas prices on the East Coast.
The Colonial pipeline, which connects the Gulf Coast to the Northeast, is about 5,500 miles and is responsible for transporting about 45 percent of the fuel on the East Coast. The pipeline was shut down last Friday to protect the system after it became the subject of a ransomware cyberattack.
The company plans to resume all operations by the end of the week. By Monday night, the company had one mainline open again, but it was open to a limited extent and required manual operation.
It was unclear if there were any updates on progress as the company’s website was closed Tuesday morning.
“This closure will have an impact on gasoline availability and prices, but the impact will vary by region,” said Jeanette McGee, a spokeswoman for the American Automobile Association.
She said limited supply and price increases are likely in Mississippi, Tennessee and the eastern seaboard from Georgia to Delaware.
However, traders noted that there is currently enough supply in tanks to meet demand and that there are other options if pipelines remain closed for an extended period of time. In addition, the Department of Transportation declared a state of emergency in 17 states and the District of Columbia on Sunday evening, thereby easing some restrictions around tanker trucks transporting gasoline and other fuels.
Motorists are already seeing early runs for gas amid expected shortages, and stations in some states are already running low on fuel.
Patrick De Haan, GasBuddy’s director of petroleum analysis, said there has been some panic buying at gas stations in Georgia, North Carolina and Tennessee.
If the impact continues, fuel suppliers could switch to truck and rail deliveries of fuel. The U.S. Department of Transportation on Sunday lifted fuel hauler driver restrictions for 17 affected states.
U.S. fuel importers are booking tankers to import gasoline from Europe. U.S. refiners, including Motiva Enterprises and Total, have cut production at their Gulf Coast plants Monday because of a lack of capacity.
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