By Shariq Khan
NEW YORK (Reuters) - Fuel distributors in Florida were bracing for supply shortages as government officials issued dire warnings about strengthening hurricane Helene, which is forecast to make landfall in the state on Thursday evening.
Florida is the third-largest gasoline consumer in the United States, but there are no refineries in the state, making it dependent on imports. Only two pipelines deliver fuel within Florida, so a hurricane's hit to waterborne supplies leaves the state extremely vulnerable to fuel shortages.
Port Tampa Bay, which receives over 17 million tons of petroleum- and natural gas-related products in a typical year, has ceased inbound and outbound vessel traffic. The exact duration of port closures and impact on fuel trade remains uncertain, the U.S. Energy Information Administration said on Thursday.
At least two fuel distributors have told customers to expect deliveries to be delayed. Mansfield Energy on Thursday moved Florida to its 'Code Red' classification, requesting a minimum 72-hour notice for new deliveries. Mansfield also put Alabama and Georgia on a 48-hour notice.
Tropic Oil, which typically delivers the day after an order is placed, asked its customers to prepare for extended wait times, a representative told Reuters.
Wholesale terminals are struggling to stay supplied due to the spike in demand, traders at TACenergy told clients. They expect terminal operators to suspend operations from the Florida panhandle to Tampa to avoid draining tanks so low that it poses an operational hazard.
Kinder Morgan (NYSE:KMI), operator of the only fuel pipelines in Florida, said its bulk terminals in the Tampa area have been shut in preparation for the storm. Its pipelines are still operating normally, the company said.
Edison Oil, which pulls fuel from terminals at Tampa and the Everglades, said it has been stocking up as much as it could to prepare for shortages after the hurricane.
Power outages will be the major issue for the state's fuel infrastructure, said Ernie Barsamian, founder of oil and fuel brokerage The Tank Tiger.
Over 60,000 homes and businesses were out of power in Florida as of 2:00 p.m. ET. State officials have asked residents in the path of the storm to prepare to be without power for up to a week.
Retail fuel prices in Florida have been stable so far but they will likely creep upwards as power outages and other disruptions start to build, AAA spokesperson Andrew Gross said. Regular gasoline was retailing at $3.176 a gallon across Florida pumps on Thursday, according to AAA data.