Wholesale gasoline prices spike on Ike's approach

Hurricane is approaching Texas, a major refining center

By Tom Stundza -- Purchasing, 9/11/2008 1:32:00 PM

The wholesale price for gasoline produced on the Gulf Coast has jumped about 46% on the spot market since Wednesday as Hurricane Ike churned toward the massive Texas petroleum refining infrastructure.

On Wednesday, a gallon of gas cost $3.25 on the Gulf Coast wholesale market, and by Thursday afternoon, wholesale gas cost more than $4.75 a gallon, according to a CNNMoney report quoting Tom Kloza, the chief oil analyst for Oil Price Information Service, an independent publisher that follows wholesale and retail fuel prices in North America, topping the high price five years ago when hurricanes Katrina and Rita raked the Gulf Coast. The spike will almost certainly lead to high pump prices for consumers, as the gasoline makes it way from the wholesale market to retailers.

The Associated Press reports that Texas is home to 26 refineries that account for one-fourth of U.S. refining capacity, and most are clustered along the Gulf Coast in places such as Houston, Port Arthur and Corpus Christi. Exxon Mobil Corp.'s plant in Baytown, outside Houston, is the nation's largest refinery.