Gas prices in Leitchfield and other Grayson County communities were lower Tuesday morning than in many surrounding communities, but it’s a price break that’s not going to last long.
A gallon of regular unleaded gasoline was selling for $3.60 to $3.64 Tuesday morning, well below the average $3.75 cost in Elizabethtown. While that price difference had been in place since at least Saturday, it was evaporating Tuesday afternoon. Stations in downtown Leitchfield had already jumped the per-gallon price above $3.79.
Before the jump only Owensboro, where some stations were selling regular unleaded at $3.51 Tuesday , was lower than Leitchfield. Radcliff, Morgantown and Bowling Green were averaging $3.75 per gallon Tuesday morning, according to GasBuddy.com.
The combination of Hurricane Isaac and the upcoming Labor Day weekend were driving prices up.
Some refineries are closing their plants in the Gulf Coast region out of caution, and dozens of Gulf oil and natural gas rigs have already been evacuated. Federal authorities reported that 58 percent of oil platforms and 54 percent of oil rigs in the Gulf of Mexico had been evacuated, halting about 78 percent of Gulf oil production.
Isaac is likely to have only a slight impact on gas prices initially, but pump prices could surge sharply if the storm triggers flooding or power outages that shut down oil refineries after it makes landfall.
Gas prices jumped about 2.5 percent on futures markets Monday, although crude oil prices fell.
“Theoretically, you’ll get a small increase in crude prices (that) doesn’t amount to more than a few pennies at the pump,” said Kevin Book, an analyst at ClearView Energy Partners LLC.
Isaac reached Category 1 hurricane status, capable of sustained winds from 74 to 95 mph, Tuesday morning. Residents in flood-prone, low-lying areas around New Orleans were being told to evacuate, and a hurricane warning was issued for a 300-mile stretch of the Gulf Coast in four states from Louisiana to the Florida Panhandle.
The storm was expected to come ashore sometime late Tuesday, with rainshowers from its aftereffects hitting Kentucky Saturday and Sunday.
“Storm surge and heavy rainfall are other hazards that have the potential to impact the landfall area,” Risk Management Solutions said in a new report, warning of the potential for a six- to 12-foot storm surge in southeastern Louisiana and Mississippi. If either refining or distribution in the Gulf is sidelined for days or weeks, drivers could see gas prices go up 10 to 25 cents a gallon, Book said. The national average gas price is currently $3.73 a gallon, up more than 7 percent over the past month.
Prolonged refinery closures in the Gulf Coast could drive up prices further and longer. “We’re definitely going to see a bump,” says Brian Milne of energy tracker Telvent DTN. “We’re going to get into the $3.80s at minimum and it could go higher, depending on how quickly things are resolved.”