WASHINGTON, September 20, 2017 - Florida gasoline markets are still struggling to recover from the increased demand - sparked by early evacuation orders - and disruption of the supply chains needed to deliver gasoline.
As the storm approached, shipping traffic was diverted and ports closed, stopping the flow of petroleum products into Florida. People filling their gasoline tanks in anticipation of the storm resulted in a rapid increase in demand. In Irma’s aftermath, demand is returning to normal, allowing time for resupply to arrive and supply chains to adjust.
When Hurricane Harvey made landfall in Texas, retail gasoline prices in Florida and Miami increased 10 cents and 5 cents per gallon, respectively. Then as Hurricane Irma approached, increased demand and falling inventories caused Florida and Miami gasoline prices to increase by 40 cents and 39 cents per gallon, respectively, between Aug. 28 and Sept. 4.
There are no refineries in Florida or pipelines connecting the state to supply centers along the Gulf Coast or any other state. Therefore, unlike most other parts of the country, Florida is almost entirely supplied by marine movements of petroleum products from domestic and international sources.
Resupply of gasoline is arriving through several large ports located along Florida’s coastline, each transporting fuel to nearby markets via truck and short-distance pipeline. Terminals within the Port of Tampa supply much of the state’s west coast. South Florida is supplied via terminals in Port Everglades, just north of Fort Lauderdale. Central Florida is supplied via pipeline from Tampa and Port Canaveral on the Atlantic Coast. Northeastern Florida is supplied by terminals in the Port of Jacksonville. The only product supplied to Florida through a pipeline is sourced from a terminal in Bainbridge, Georgia, that is connected to the Colonial Pipeline system and supplies the Florida Panhandle by long-distance tanker truck. The rest of western Florida is supplied via truck and barge movements via the Intracoastal Waterway from nearby refineries in Alabama and Mississippi.
Gasoline consumption in Florida averaged 493,000 barrels per day (b/d) in 2016, representing 5 percent of total U.S. consumption. Over the past five years, Florida’s monthly gasoline consumption ranged from 428,000 b/d to 538,000 b/d. Hurricanes alter these typical and planned-for demand patterns. Evacuations of large population centers preceding the hurricane increased passenger car travel and pre-storm fuel purchases, rapidly increasing gasoline and diesel demand at retail stations. This demand increase resulted in a large call on available inventories at product distribution terminals within the state.
Florida is mostly supplied by domestic refineries along the Gulf Coast and supplemented with imports. In the first half of 2017, tanker and barge movements of gasoline from the Gulf Coast, or Petroleum Administration for Defense District (PADD) 3, to the Lower Atlantic, or PADD 1C, which includes Florida, averaged 488,000 b/d. A large share of these movements were to Florida, with the Port of Tampa typically receiving the largest volumes, according to the EIA PADD 1 and PADD 3 Transportation Fuels Study. In 2016, Port Canaveral received the highest imported gasoline volumes of the ports in Florida, 15,000 b/d, with the largest suppliers being refineries in Europe.
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