As more of the fallout from Hurricane Katrina continued, fuel prices across the country jumped significantly as supplies in the Southeast became increasingly tighter.
About 95 percent of the fuel production capacity of the Gulf region is shut down and oil companies are still trying to gauge just how much damage has been done. Nine oil refineries - accounting for about 11 percent of total U.S. refining capacity - have been shut down.
On Thursday, Sept. 1, gasoline had topped the $3 per gallon mark in many parts of the Midwest and the East Coast, jumping as much as 50 cents in some areas. Record-setting $6 prices in Atlanta prompted Georgia Governor Sonny Perdue to issue an executive order to protect consumers from price gouging.
Diesel prices also had heavy increases overnight. ProMiles posted a national average price for diesel of $2.83 per gallon on Thursday, Sept. 1, up nearly 13 cents from the previous day.
However, regular gas prices were starting to outpace diesel in many areas. New York City saw regular gas prices as high as $3.65 per gallon in some areas, while diesel had a high of $3.39, according to NewYorkGasPrices.com.
Trading for light, sweet crude oil had not again breached the $70 mark as of midday on Thursday. The high at that time was right around $68 per barrel.
On Wednesday, Aug. 31, the White House announced that it would release oil from the Strategic Petroleum Reserve to keep refineries going. It is still not known exactly how much will be released from the petroleum reserves, but U.S. Secretary of Energy Samuel Bodman said the effects would be limited no matter how much was released.
Bodman said the problem is that there isn't enough refinery capacity available at the moment to process it all.
"It'll help some," he said in a press conference. "But we have significant refining capacity that is dysfunctional."
The Energy Information Administration issued a report Thursday that said some refineries in the Gulf could be out of operation for several months, while others could be back in operation within a couple of weeks.
Further concerns were raised by the EIA about heating oil, as this is the time of year that many refineries begin to switch over to heating oil production for the winter season.