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Gasoline’s here, on its way

Xavier Smith • Updated Sep 20, 2016 at 9:00 AM

The company at the root of last week’s gas shortage said Monday morning that gas is being delivered to markets in the Southeast, although delivery times remain uncertain. 

Colonial Pipeline issued a statement Monday after a leak in one of the company’s pipelines sent Tennesseans into a panic last week on the brink of a believed fuel shortage.  

“In an effort to minimize supply disruptions, last week Colonial Pipeline gathered gasoline from Gulf Coast refiners in order to ship supplies on its distillate line to markets throughout the affected region. As a result, following around-the-clock operations to affect this contingency plan, supplies of gasoline have been delivered and/or are in route to terminal locations in Alabama, Georgia, Tennessee, South Carolina and North Carolina. Delivery times to mainline and stubline terminals in these markets vary,” the statement said. 

Gov. Bill Haslam declared a state of emergency Friday that waived federal hours of service requirements for petroleum transporters to prevent any fuel supply disruptions for Tennesseans due to the leak. The declaration also allowed drivers to work longer hours to bring petroleum to convenience stores, fuel retailers and fuel wholesalers in the state. 

Haslam said the declaration was a precautionary measure and the area had not seen widespread unavailability of gasoline at the time. He also urged drivers to maintain normal fuel purchasing habits to keep up with gas demands. 

However, as word of the state of emergency declaration spread through various channels throughout the state, residents flocked to convenience stores to stock up on fuel for the believed future outage. 

By Friday night, Kroger reported about 30 stations were without gas, while Exxon stations in Lebanon and Mt. Juliet were also without fuel. 

The Tennessee Fuel and Convenience Store Association and the Tennessee Grocers and Convenience Store Association released a joint statement Sunday and reported some convenience stores reported gas sales around 50 percent higher than normal. 

“We are at the western edge of the Colonial Pipeline territory,” said TFCA executive director Emily LeRoy. “There is plenty of fuel at the oil refineries, we just need to travel farther to transport the fuel into Tennessee.”

LeRoy said as a result of Colonial Pipeline’s decision to move gasoline in a line normally reserved for diesel, Nashville fuel terminals began receiving pipeline deliveries of gas Saturday. This is providing a steady, local source of gasoline for middle Tennessee retailers, according to LeRoy. 

The release said factors that contributed to higher prices at the pump include higher “rack” prices caused by the tight fuel supply across the Southeast and increased transportation costs as wholesalers travel longer distances to deliver fuel.

As prices surged, residents questioned the necessity of the increases and began reporting possible instances of price gouging. As of Monday, more than 600 complaints were filed with the Tennessee Department of Commerce and Insurance. 

Tennessee’s price gouging laws make it unlawful for individuals and businesses to charge unreasonable prices for essential goods and services, including gasoline, in direct response to a disaster regardless of whether that emergency occurred in Tennessee or elsewhere. The price gouging law makes it unlawful to charge a price that is grossly in excess of the price charged prior to the emergency.

“Our priority is to protect consumers,” TDCI Commissioner Julie McPeak said Saturday. “Should there be businesses or individuals who use this situation to take advantage of others through gasoline price gouging, we encourage consumers to report it to our consumer affairs division so that we can follow-up accordingly.”

The price gouging complaints received by consumer affairs are all individually evaluated. Costs will be considered by an evaluation of the increases of costs associated with fuel along with the increases in costs to the retailer and the increase in price to the consumer. 

Consumer affairs consults with legal counsel and the Tennessee attorney general’s office in all evaluations for price gouging violations.

Under normal circumstances, the Colonial Pipeline system delivers about 2.6 million barrels of refined products each day, with Line 1 (leak line) accounting for half of that volume. Colonial is currently shipping significant volumes of gasoline on Line 2, the distillate mainline, to help mitigate the impact of the service interruption to Line 1. These changes have allowed all origins and delivery markets to be served along the entire system, albeit in a reduced capacity, according to Colonial. 

To report potential price gouging, visit tn.gov/commerce/article/consumer-price-gouging-complaint.

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