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Seasonal slide in gas prices delayed

Pipeline disruption in the southern United States may be skewing the national average price higher.

By Daniel J. Graeber
Seasonal slide in gas prices delayed
A problem with a pipeline in the southern United States in part to blame for a seasonal decline in retail fuel prices, motor club AAA reports. Photo by Ismael Mohamad/UPI | License Photo

WASHINGTON, Sept. 20 (UPI) -- A problem with a pipeline in the southern United States in part caused a delay in the seasonal downturn for gasoline prices, a retail market report found.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline $2.21, just a slight overnight increase, but 2.7 percent higher than one month ago. Outside of market dynamics, AAA said in its weekly retail market report that infrastructure issues were skewing the national price higher.

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"Regional pump prices fluctuated dramatically this week due to pipeline repairs and localized supply disruptions," the report read. "In early September, a leak on Line 1 of the Colonial pipeline occurred in Alabama and pressured prices in Southeast states sharply higher, including week-over-week increases of 7 cents or more in Georgia, North Carolina, South Carolina and Tennessee."

Line 1 runs east from Houston and has the capacity to carry as much as 1.2 million barrels of gasoline per day and the disruption sparked a fuel emergency in some southern states. The company behind the project said it was busy building a section to bypass the damage and AAA said that part should be in service by the end of the week.

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Southern U.S. states have seen the biggest spikes in gas prices nation-wide, with Georgia posting a 21 cent increase from last week to $2.36 per gallon. Alabama and neighboring states, however, continue to have some of the lowest prices in the country. Texas has the lowest average at $1.95 per gallon, while California has the highest price in the Lower 48 at $2.76 per gallon.

Refiners last week started to make a winter blend of gasoline which, because of the fewer environmental safeguards necessary in cooler months, is cheaper to make. Despite the disruption in southern U.S. states, the national average price for a gallon of gas is still 3.5 percent less than this date in 2015.

On the market side, AAA said crude oil prices have moved somewhat lower since last month amid reports of abundant supplies with diminishing demand.

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