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Fuel outages begin to ease in US Northeast

11.05.2012  | 

Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey, said a key bottleneck remains the closure of some major fuel terminals - a problem that means that the remaining terminals that are open face greater demand than normal.

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By DAN STRUMPF

NEW YORK -- Fuel was flowing again at more gas stations in the Northeast on Monday, as the lights came back on at additional stations. But power outages along the supply chain continue to idle many pumps.

About half of gas stations in New York City were up and running Monday, while between 40% and 45% of Long Island stations had resumed sales, according to data from auto club AAA.

The number of operational stations inched higher in both states over the weekend as electricity began to be restored.

However, New Jersey faced the biggest problem, said Avery Ash, AAA's manager of regulatory affairs. The number of operational stations there was relatively unchanged Monday at between 45% to 50% compared with Friday, as power problems persisted, Mr. Ash said.

"The situation is beginning to get a little better," he said. "Obviously not as quickly as we and motorists would like. The underlying issue here is still an issue of outages, not shortages."

New Jersey remains the worst-off state in the wake of Sandy, which made landfall in the state last Monday and knocked out power to millions of utility customers throughout the region. About 780,000, or 20%, of utility customers in New Jersey were without power Monday morning, according to the Department of Energy. In New York state, 6% were without power.

The power outages have been particularly troublesome, experts say, because of their impact across the supply chain, from the gas stations to the fuel pipelines to the depots that supply fuel trucks.

Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey, said a key bottleneck remains the closure of some major fuel terminals - a problem that means that the remaining terminals that are open face greater demand than normal.

As a result, truck drivers frequently have to visit multiple terminals in a day to find gasoline and might only be able to deliver one shipment a day instead of the normal three-to-six deliveries.

Gasoline demand remains robust throughout the state, in part because of extra fuel needed to keep generators going. But he said the problems appear to be improving.

"Starting yesterday and at least into today, things do not appear to be getting worse," Mr. DeGesero said. "It's not good, but it doesn't appear to be getting worse.

Gene Guilford, president of the Independent Connecticut Petroleum Association, said gas stations in the state have seen an influx of motorists from New Jersey and New York, who are crossing state lines in search of stations with power and fuel.

"Really it has to do with the power outages," he said. "I don't really characterize this as a gasoline-supply problem as much as it is a gasoline-distribution problem."

Some key chokepoints in the supply chain have returned to normal. A key line run by Colonial Pipeline Co. supplying 700,000 bpd to New Jersey was back to running normally Monday, Colonial spokesman Steve Baker said. But smaller lines that connect terminals are not fully back online due to electricity outages.

The pipeline is delivering to customers who are "ready to receive from us," he said. But all of the pipeline's customers won't be back on for weeks or even months.


Dow Jones Newswires



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