NBC's Tom Costello reports on the recent spike in prices at the pump as travelers hit the road for the Labor Day weekend.
Updated at 2:57 p.m. EDT: Gas prices jumped again Thursday in the wake of Hurricane Isaac, leaving drivers facing the prospect of costly fillups as they take to the highway for a final summer spin over Labor Day weekend.
Prices climbed two cents a gallon to $3.82 nationally to a record for this time of year and are likely to edge higher still in coming days, the American Automobile Association said. The gains came on top of a five-cent surge Wednesday when Isaac pounded the oil-rich Gulf Coast region. The price has risen steadily from the summer low of $3.33 on July 2.
Consumers are likely to get a price break soon as oil and gas companies gradually restart their Gulf operations, but AAA said drivers should expect to pay a few more pennies by the end of the holiday weekend.
Isaac spared heavily populated New Orleans from the devastation wreaked by Hurricane Katrina seven years ago. But this week’s storm caused widespread damage and dumped more water in the region than its sister storm seven years ago, according to the National Weather Service. Thousands remain stranded and power outages have been widespread.
Up to 50,000 people in Louisiana were ordered to evacuate Thursday as a dam seemed ready to give way across the state line in Mississippi.
Drivers caught a break, though, as the storm appears to have spared the region's many refineries and oil rigs, unlike the devastation that affected the industry for months after Katrina in 2005. As a result, AAA analysts expect pump prices to decline quickly after the holiday.
“We would expect prices to be going back down by mid-September,” said Michael Green, AAA public relations manager. “We can’t estimate exactly how much. “
Isaac’s slow journey through the Gulf and Louisiana’s energy-refining heartland is still driving prices higher across the land, but from initial assessments the storm appears to have had no lasting damage on energy infrastructure, he said. Refineries and rigs shut down as a precautionary measure.
One refinery in Belle Chasse, La., was flooded, according to wire reports.
“It’s a little early to say for certain but it appears they were relatively unharmed,” said Green. “It’s still to be seen when there are deeper assessments, but so far there are no reports of anything significant. That’s good news for the oil refiners.”
As the storm headed north, Illinois Attorney General Lisa Madigan warned gas stations owner against price gouging after complaints against some Southern outlets in the storm’s path.
“I’m putting (gasoline station) retailers on notice that these circumstances are not an excuse to gouge customers at the pump,” said Madigan. “My office will be closely monitoring gas prices to ensure gas station owners are operating legally.”
Despite the storm and the higher gasoline costs, nearly 33 million Americans still plan to travel for Labor Day, said AAA. That would be a 3 percent rise in traffic from a year ago. Americans have been driving more on major holidays this year than they did during the depths of the recent recession, the association reports.
Amid higher fuel demand and low gasoline inventory, prices have been pushing higher, although consumers will get a break soon due to a recent jump in refinery output, said Green. Refiners have had a relatively trouble-free season and were able to boost supplies to move to gas stations ahead of the storm season.
With the end of summer, there will be fewer drivers are on the roads, as well, further reducing fuel demand. The change of season also means stations can sell less expensive gasoline than the ozone-friendly mix they are required to pump in summer months.
Another storm could tip the scales once again. The official end of the hurricane season is Oct. 31.
“There is still a chance of more storms but Labor Day is generally considered the peak,” said Green.
For gasoline prices, it looks like high time is this weekend.
(This story has been corrected from a previous version.)
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