The June 21 explosion and fire at the Philadelphia Energy Solutions’ Philadelphia refinery will result in the refinery’s closure, a process likely to begin next month, which will in turn impact local gas prices, AAA Mid-Atlantic announced in a June 26 press release.
PES is the largest refinery on the East Coast, producing 335,000 barrels of crude per day, or 42 U.S. gallons per barrel. In addition to unbranded gasoline, the facility also produces jet fuel and diesel, according to its website.
“The closure of the PES refinery, the largest on the East Coast, will likely have an impact on gas prices in and around the region, though it is too early to know how much prices could increase, especially during the peak summer driving season, and for how long,” said Jana L. Tidwell, manager of Public and Government Affairs at AAA Mid-Atlantic. “Motorists in the region will likely continue to see modest increases in pump prices — especially leading up to what is expected to be a high-demand travel period for the Fourth of July.”
The full impact of the PES refinery closure will depend on market reaction, gasoline demand and supply, as well as crude oil prices. Summer brings higher demand for gasoline due to peak driving season. This coupled with increased transportation costs, for getting gasoline to stations, will be the biggest factors driving gas prices in the Northeast and potentially neighboring regions.
Gasoline stocks from Canada, neighboring refineries and the Colonial Pipeline were identified as solutions to help backfill supply following the incident. The long-term viability of this situation is unknown.
For Delaware, gas prices as of June 26 were, on average, $2.48 per gallon. Gas was $2.49 per gallon June 21, and one year ago, on June 26, 2018, gas was $2.69 per gallon.
AAA will continue to monitor the situation and provide motorists with updates on how this will impact summer gas prices.
For more, visit aaa.com.