US panic-buying feeds into fuel shortage, sending gasoline prices higher – analyst

Panic-buying and fuel-hoarding after the recent outage of the Colonial Pipeline network is the cause of the US gasoline price spike, according to the chairman of Alfa Energy John Hall.

The biggest fuel-carrying infrastructure facility on the US East Coast was targeted by a ransomware cyberattack last Friday. The attack forced the Colonial Pipeline Company, the pipeline’s operator, to halt supplies to the entire network for nearly a week. The company has since reportedly paid the $5 million ransom and is restarting operations.

Also on
FILE PHOTO: Holding tanks are seen in an aerial photograph at Colonial Pipeline's Dorsey Junction Station in Woodbine, Maryland, US.
Oil pipeline cyberattack exposes America’s multi-trillion dollar infrastructure security crisis

“There need not be a shortage, but people are panic-buying and hoarding fuel, thereby creating a shortage and pushing the price over $3 per gallon,” the expert told RT.

The full-scale shutdown naturally led to fuel shortages and emergency declarations in states across the US. On Wednesday, the company announced a restart of its operations, saying that it would pump out as much fuel as it could.

Also on
A local resident fills up a gas can as demand for fuel surges following the cyberattack that crippled the Colonial Pipeline, in Durham, North Carolina, May 12, 2021.
Colonial Pipeline resumes operations after cyberattack, but warns supply chain issues will take ‘several days’ to resolve

The analyst expects the market to calm down once the pipeline is back in use. However, concern will ramp up in refinery programs if the emergency runs beyond the weekend.

“So, as of now, the problem is consumer driven, and until we know the plan and can see it working, the market will overreact further, leading to shortages and higher prices,” he said.

For more stories on economy & finance visit RT's business section

Post a Comment