Will cyberattack on pipeline drive gas prices higher?

After Colonial pipeline attack, prices have remained stable

The demand for gas is rising after a crucial pipeline was hacked. It's causing panic-buying in some parts of the state and in Georgia, but it does not appear to be the case in Jacksonville.

JACKSONVILLE, Fla. – As the shutdown of a major fuel pipeline entered into its fifth day, efforts are underway to stave off potential fuel shortages, though no widespread disruptions were evident and gas prices have remained stable.

The Colonial Pipeline, which delivers about 45% of the fuel consumed on the East Coast, was hit by a cyberattack on Friday. The attack raised concerns, once again, about the vulnerability of the nation’s critical infrastructure. Ransomware attacks are typically carried out by criminal hackers who scramble data to paralyze their target’s networks. Large payments are demanded to decrypt it.

“My fear is you have these gas shortages, that’s going to cause a lot of problems for people,” Gov. Ron DeSantis said during a visit to Jacksonville. “Now we are relaxing our restrictions in terms of the weight in order to get more fuel trucks to the parts of Florida that need more fuel but ultimately we need the federal government to step up and help, and we don’t want to see these long gas lines persist in the northern part of the state.”

There were reports of gas stations in the Southeast running out of gasoline, according to Gasbuddy.com, which tracks outages and prices.

In Virginia, 7.5% of the state’s 3,880 gas stations reported running out of fuel. In North Carolina, 5.4% of 5,372 stations were out, the company said.

In Florida, just 2% of the gas stations had run out of fuel. Nevertheless, consumers in the Panhandle are seeing long lines.

Florida Agriculture Commissioner Nikki Fried urged: “Don’t panic to buy gas.”

Ned Bowman, with the Florida Petroleum Marketing Association -- which represents the majority of gas dealers, suppliers and convenience store retailers -- said most gasoline in the Jacksonville area comes through JaxPort, not from a pipe, and we have an adequate supply.

“What we’ve been able to do is use Jacksonville, and pull fuel from Jacksonville to parts of the Panhandle,” Bowman said.

So far, area gas prices have not spiked, although customers’ concerns are increasing demand.

According to AAA, the average price of a gallon of unleaded in the Jacksonville market on Tuesday was 2.83. While local prices have been growing steadily since last November, the current price is actually down slightly from a two-year high of 2.87 recorded on March 25.

Average price of a gallon of gas in Jacksonville from January 2019 through May 11, 2021.

Georgia Gov. Brian Kemp suspended state taxes on motor fuels through Saturday. Georgia collects a gasoline tax of 28.7 cents per gallon and a diesel tax of 32.2 cents per gallon.

“It will probably help level the price at the pump off for a little while,” Kemp told reporters at DeKalb-Peachtree Airport in Chamblee, an Atlanta suburb.

However, Kemp urged people not to hoard gasoline, saying he expected the situation to be resolved soon.

“You don’t need to go out and fill up every 5-gallon can you’ve got,” Kemp said.

Scattered gas stations in metro Atlanta were out of fuel Monday and Tuesday, but most were operating normally. In Georgia, nearly 4% of 6,368 stations had run out of fuel, Gasbuddy.com said.

VIDEO: Gas distribution problems resulting from the cyber attack are causing long lines and empty pumps in the Florida panhandle.

Florida Consumer Services Director Rick Kimsey said a perfect storm of separate issues has resulted in the distribution problems.

“It started with a fuel quality issue in the western Panhandle. That coupled with a nationwide driver shortage for petroleum truck drivers and then the cyber attack on the Colonial Pipeline,” said Kimsey.

Kimsey doesn’t expect the problem to spread statewide, as much of the Peninsula gets its gas from the ports. He said that even in the Panhandle, there’s plenty of fuel. It’s just a matter of getting it to the pump fast enough to keep up with demand, which is skyrocketing due to panic buying.

“Any pressure on the system is going to make the situation worse,” said Kimsey.

Dave Gussak drove from one station to the next in Tallahassee, Florida in search of gas without success, he said. He eventually passed a station with gas on the way to Florida State University where he works.

“This is insane,” said Gussak.

U.S. officials sought to ease concerns about rising prices, stressing that widespread disruptions have not yet occurred. The White House said late Monday that it was monitoring supply in parts of the Southeast and that President Joe Biden had directed federal agencies to bring their resources to bear.

The Associated Press contributed to this report.

About the Authors:

Jim Piggott is the reporter to count on when it comes to city government and how it will affect the community.