Wholesale gasoline spikes after Rita

Prices shoot above $3 a gallon on Gulf Coast; prices at the pump could be heading higher too.

NEW YORK (Reuters) – U.S. drivers who hoped for some relief from the high gasoline prices that followed Hurricane Katrina may be in for a surprise as prices head back up after Hurricane Rita.

Wholesale gasoline prices shot up about 50 cents on the Gulf Coast Tuesday to well over $3 a gallon, traders in Gulf Coast energy markets said, as a quarter of the nation’s refining capacity remained down after the two major storms.
The spike in wholesale prices could mean sharp hikes at U.S. service stations for the second time in a month. Wholesalers buy gas from refiners and mark it up before selling it to service stations and other retailers.

“We’re going to continue to see not only higher prices but gasoline availability issues on the Gulf Coast and other issues in the southeast United States, mainly due to fuel distribution problems over the short term,” said Geoff Sundstrom, spokesman for the travel group AAA.

Reuters