Fuel prices hold; expected to spike after Rita passes through

HOUSTON, — The price of petrol and diesel remains steady today as news reports indicate the energy-producing city of Houston may not have as big of a problem with Hurricane Rita after all.

The hurricane — a category 4 storm packing about the same punch as Hurricane Katrina — shifted early this morning, singling that it may perhaps skirt Texas’ main refining region near Houston and Galveston. The area reportedly accounts for more than 12 percent of U.S. refining capacity.

Forecasters are now saying that when the storm slams into eastern Texas early tomorrow, winds have slowed to 140 miles per hour (225 km/h) from as high as 175 mph yesterday.

But the threat of Rita has already forced the closure of many crude oil refineries, some of which have never shut down before. Production of 2.2 million barrels a day of gasoline and 1.2 million barrels of distillate fuel such as diesel has been halted, according to media reports.

With 25 percent of all US refining capacity shut down, diesel and gas prices will likely surge again after the weekend when officials have a chance to assess the destruction caused by Rita. Even if major refineries don’t sustain heavy damage, it could take up to the middle of next week to gear up and get back to capacity.

In Ontario and the Maritimes, wide-spread rumours of $2 a litre gasoline caused panic and long lineups at stations from Mississauga to Manitoulin, to Moncton.

Meanwhile, transportation on southern Texas highways is a standstill as over 2 million people are gridlocked trying to evacuate coastal areas.

Interstates 10 and 45 were jammed with traffic most of the day yesterday and this morning.

— with files from Bloomberg News; Associated Press