Fuel distributors and traders in Florida braced for a second supply shock as Hurricane Irma barreled toward the state on the heels of disruptions from Hurricane Harvey in Texas.
Irma, described by forecasters as a potentially catastrophic Category 5 hurricane is forecast to reach southern Florida on Saturday, prompting Governor Rick Scott to declare a state of emergency.
Florida does not have any refineries and its more than 20 million residents rely on refined products delivered by tanker and barge at its ports.
While locals stocked up on bottled water and plywood, fuel distributors scrambled to fill up on gasoline and diesel supplies before rough seas force port closures.
“We are also working with Homeland (Security) to get ships in before the hurricane,” said Ned Bowman, executive director at the Florida Petroleum Marketers and Convenience Store Association, which represents 98 percent of fuel sold in Florida.
Bowman added that the “window is closing fast.”
The threat of Irma looms after Hurricane Harvey killed more than 60 people, dumped over 50 inches (127 cm) of rain and damaged 203,000 homes. About a quarter of U.S. refining capacity was offline as Harvey hammered Louisiana and Texas for several days, shutting key infrastructure in the heart of the U.S. oil and natural gas industry.
Retail gas prices in Florida have already jumped about 36 cents in one week to $2.68 a gallon as of Tuesday, according to motorists advocacy group AAA.
In part because of Florida’s tourism industry and heavy passenger and cargo traffic through its international airports, state demand for motor gasoline and jet fuel is among the highest in the United States, according to the EIA.
The emergency issued by the governor also lifts trucking restrictions, allowing drivers to work longer hours and more freely bring in gasoline and fuel from other states if needed.
"You basically had people in all 67 counties rushing out to get gas, food and water," he told CNBC"The shortages that we're seeing are very sporadic and temporary. It's not an issue of supply. It's an issue of resupply," Miller added.
Florida Gov. Rick Scott on Wednesday urged evacuees to take only as much gasoline as they need. Several counties in southern Florida had declared or were considering mandatory evacuations by Wednesday.
"One of our top priorities right now is fuel availability," Scott said during a news conference.
"We are doing all we can to streamline fuel delivery" but there will be lines, he said.
Miller stressed that the Sunshine State has seven days worth of fuel even if all ports and roads are closed. Just a few days ago, some Florida distributors were redirecting supplies to Texas to help areas hard hit by Hurricane Harvey, he said.
Stations ran dry in Dallas last week as panic buying exacerbated problems shipping fuel from refineries to retail pumps due to flooding on the Gulf Coast. In Florida, the shortages appear to be purely the result of a pre-emptive buying.
"The demand surges in advance of the storm as everyone fills up, and then they hunker down in their homes as the hurricane approaches and passes," said Andy Lipow, president of Lipow Oil Associates.
Most of Florida's fuel arrives by ship from refineries along the Gulf Coast, so analysts will be monitoring the state of the ports after Irma passes, Lipow said.
Damage to those facilities will tell whether shortages caused by panic buying will turn into more prolonged supply disruptions.
So long as the terminals get through the storm undamaged, the demand spike should reverse as motorists stay off the roads and businesses close down.
It's an expensive time for Floridians to be filling up. Average gas prices across the state were at $2.71 a gallon on Wednesday, up from $2.35 a week ago, according to AAA.
At the wholesale level, U.S. gasoline futures were down nearly 2 percent at $1.6691 a gallon, continuing to slide as Gulf Coast refiners got their facilities up and running. Harvey disrupted about 20 to 25 percent of U.S. refining capacity through last week, causing a brief spike in wholesale prices.
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