NYC follows N.J. Lead, Institutes Odd-Even Gas Rationing

By Brian L. Milne, Refined Fuels Editor, Telvent DTN

In the aftermath of Hurricane Sandy, which was followed by a less destructive but still menacing nor’easter, the fuel distribution chain in the Northeast continues to experience disruptions.

Phillips 66 estimates it would take another week or two before a resumption of normal operations would occur at its 238,000 bpd Bayway Refinery in Linden, N.J., which experienced flooding, a power outage and an oil spill. Hess has yet to provide a restart timeline for its 70,000 bpd Port Reading refinery in N.J., also shut ahead of Sandy while encountering flooding and a loss of power due to the storm.

Most terminals have reopened following the storm, yet Hess said its N.J. terminals in Bayonne and Newark remain shut. Meanwhile, Buckeye Pipeline said late Nov. 9 service on its eastern pipelines in New York, New Jersey, and Pennsylvania, which were all operating as of Nov. 2, are “severely constrained” due to inadequate pipeline supply.

“[M]any of the facilities supplying product to our Eastern Systems are still without power or had their infrastructure damaged to the point they either cannot make deliveries to us or are at restricted flow rates,” said the pipeline operator in a bulletin to shippers.

View Telvent DTN’s Weekly and Historical Fuel Price Index.

After N.Y.’s plan that had the National Guard dispersing 10-gallon cans of gasoline for free failed to quell demand, in fact it increased it, parts of New York City and Long Island moved to an odd-even license plate rationing plan for motorists at the region’s gasoline outlets, where more than a quarter of stations are not selling gasoline.

N.J. had already directed gasoline stations in several counties in the state to move to the odd-even rationing plan, which allows motorists to fill up with gasoline on odd or even days based on the final digit of their license plate. Reports suggest N.J.’s directive cut gasoline lines in half.

The Energy Information Administration (EIA) estimated that as of Nov. 9 28% of gas stations across the New York City metropolitan area did not have gasoline available for sale. That’s down from 67% on Nov. 2, although the EIA said the 28% “remains a significant problem.”

Wholesale gasoline prices, which were on the downturn, where mostly higher coming into Veterans Day, as supply shortfalls in the New York Harbor market trigger short covering. We could see the trend continue in the near term amid the supply chain disruptions despite lower demand, with preliminary data from the EIA showing implied gasoline demand was down 537,000 bpd to 8.307 million bpd during the week when Sandy hit from the week ahead of the superstorm’s landfall near Atlantic City, N.J., on Oct. 29.

About the Author
Brian L. Milne is the Refined Fuels Editor for Telvent DTN—a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for 16 years as an analyst, journalist and editor. He can be reached at brian.milne@telventdtn.com.

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