Gas prices at all time high due in part to Katrina

By Jillian Milam
September 16, 2005

Taila Giordano

The only thing more shocking than the astronomical gas prices lately is the idea that they are expected to maintain this way for a period of time.

According to, the price of the U.S. average for regular gasoline increased 46 cents from the previous week to $3.07 per gallon on Labor Day, Sept. 5. Drivers have been experiencing high gas prices as well as the long lines to get it due to gas stations running out of their supply, which is something that has not happened since the 1970s, according to

Why are the prices so high and what is to happen in the future?

Hurricane Katrina serves as a main reason, due to the 25 percent of U.S. crude oil production that was affected and the 10-15 percent of refinery capacity that was shut down for the first few days, according to This resulted in the decline of gasoline production and caused the prices to soar even further than the Labor Day prices.

According to, retail gasoline prices are likely to remain very high for some time to come, with as much as 5 percent of refinery capacity possibly being out of commission for a few months.

Carli Pio, a senior English/communication major, has recognized this dramatic increase in cost and is using her vehicle as little as possible.

“My car hasn’t moved in about five days…aside from gas prices and finding a parking spot here at school…my car pretty much just stays where it is,” Pio said. “Now that I’m back at school, my car just sits there and I try to get other people to drive.”

It has been speculated that gas companies are using Hurricane Katrina as justification for pricing gas much higher than normal. Bill Wichert, an employee at a North Penn Gulf gas station in Lansdale, Pa., has been a witness to these changing prices and comments on the effects.

“The oil refineries that produced crude oil and gasoline have shut down…it’s less oil and less gas production so it’s basically a matter of rationing prices, like supply and demand,” Wichert said. “At least that’s the excuse they give me. I don’t have any facts to back it up, but I think gas companies are using the hurricane as an excuse.”

While the regular gas at this North Penn Gulf station was priced at $2 this past July, it has moved up now to $3.26. What was the price of regular gas this time last year?

“I’m not exactly sure, but my guess is that it was around $1.60.

Prices began to rise before the hurricane.

“Gas prices were already on the rise. They raise gas prices in the summer because there’s more traveling,” Wichert said. “It’s always been that way.”

The owner of North Penn Gulf makes about six cents for every gallon, according to Wichert. “If it’s $3.26 he pays about $3.20 for it. Everybody needs to make some sort of a profit, even though six cents isn’t that much at all,” Wichert said. “It’s the actual gas companies that are making the big profit.”

President Bush has made statements in his announcements regarding the reserve barrels of oil the United States possesses for emergency situations. In order to help citizens with the high prices of gas, President Bush has stated he will open these reserves to increase the amount of circulated gasoline. However, the oil that is released still has to be refined into gasoline, and refineries have been affected by the hurricane.

Another measure that might be taken by the government is the rationing of gas. If prices keep increasing, rules might be employed so as to let people buy only a certain amount of gas, for example, only $10 dollars at a time, or to let people only purchase gasoline on specific days of the week.

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Jillian Milam

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