Gas shortages worsen as fuel prices spike after Colonial Pipeline ransomware attack

Motorists alarmed by rising gasoline prices and fears of supplies running low are flocking to gas stations in the Southeast as the impact of a ransomware attack that crippled the country's biggest fuel pipeline ripples across the region. Relief, however, is on its way, with Colonial Pipeline saying gasoline is being shipped to nearly all of its markets. 

Fuel should be flowing again as the company restarts operations in a process expected to take several days to a week for a full return to normal, easing the supply strain that's particularly acute in southern Virginia, the Carolinas, Georgia and Tennessee. 

President Joe Biden offered assurances that Americans would soon see the long lines for gas lessening as the pipeline company started its recovery from a cyberattack that forced its systems offline last week. 

"They should be reaching full operational capacity as we speak, as I speak to you right now. That is good news," the president said on Thursday. "But I want to be clear. You will not feel the affects at the pump immediately. This is not like flicking on a light switch, said Mr. Biden, who noted there are 5,000 miles of pipeline to bring back into commission.

Mr. Biden also urged Americans not to panic and gas stations to refrain from price gouging. He declined to comment on a report from Bloomberg that Colonial Pipeline paid hackers a $5 million ransom.

Georgia based-Colonial on Thursday said fuel deliveries are now underway in most of its markets. Gas is flowing again across most of the Deep South, while the company expects the part of the pipeline serving the Mid-Atlantic region to become operational later Thursday.

"We are not out of the woods yet, but the trees are thinning out," Richard Joswick, global head of oil analytics at S&P Global Platts told the Associated Press in an email. Full recovery for the East Coast and Gulf Coast could take at least a few weeks, he said.

The pipeline stretches from Texas to New Jersey, but the northeastern U.S. has seen fewer disruptions because those states are supplied more by other sources, such as ocean tankers.

Gas prices jumped 7 cents since the pipeline was taken offline on Friday until Thursday morning, pushing the national average to nearly $3.03 this week, the highest since October 2014, according to AAA. 

Beyond pricier gas, the pipeline disruption and subsequent panic buying left about 1,800 stations across the U.S. without fuel, according to travel app GasBuddy. That includes an Exxon station in Charleston, South Carolina, which was completely sold out of gas as of Wednesday afternoon, according to a spokesperson.

The Cumberland Farms gas station on Highway 1 in Vero Beach, Florida, reported long lines all day for gas currently selling for $2.75 a gallon. 

"We still have gas, but it's going really fast. We may run out today," a worker at the station told CBS MoneyWatch. "We've been going through about 2,000 gallons of regular gas an hour. We only have 1,000 gallons of gas left until we get our delivery," which the attendant noted was expected tonight. "Diesel is OK. But everything else is dwindling down very fast." 

After peaking at 73% of gas stations in the Atlanta metro area as reportedly without fuel as of midnight, the count had improved to 68% with no gasoline by Thursday afternoon. Forty-eight percent of gas stations across Georgia were without fuel, according to GasBuddy, which compiles its data using "crowdsourced" reports from consumers. 

Other hard-hit areas include the District of Columbia, where 73% of stations were empty, and in North and South Carolina, where 68% and 52%, respectively, had no fuel. In Virginia, motorists were out of luck at 52% of stations, while 30% of stations in Florida were empty on Thursday afternoon. 

In North Carolina on Thursday, drivers were paying an average of $2.88 for a gallon of regular gas, up more than three cents from Wednesday and 18 cents higher from a week ago, according to AAA. Georgians were paying an average of nearly $2.99, up three cents from the day before and 25 cents higher than only a week ago. 

A RaceTrac gas station in Acworth, Georgia, ran out of gas over the weekend and hasn't received a new shipment in four days. "We don't have any gas, and we have no idea when we will get more," a spokesperson said. "We've turned plenty of people away. The phone rings all day long."

Gas prices had already been edging up before the cyberattack on growing consumer demand and resurgent economic growth, with AAA noting "significant recent increases in online traffic and bookings on AAA.com, particularly for hotels and car rentals, heading into the summer travel season." 

Charging $5.99 a gallon at some pumps

The return of $3 a gallon gas signals "things are slowly returning to normal" as the pandemic begins easing in the U.S., Patrick De Haan, head of petroleum analysis at GasBuddy, said Wednesday in a statement. "In this case, rising gas prices are a sign Americans are getting back out into the world — attending baseball games, going to concerts, taking a road trip — basically staying anywhere but at home."

That step towards normalcy was jolted by last Friday's cyberattack against the pipeline, which supplies about 4% of the East Coast's fuel needs. The FBI has said DarkSide, a criminal ransomware group based in Eastern Europe, is behind the attack.

After the attack, the governors of Florida, Georgia, North Carolina and Virginia — where the Colonial Pipeline is a key source of fuel — declared states of emergency. The moves coincided with spurts of panic buying and pushed prices at the pump higher.

Social media quickly offered visual illustrations of hoarding by motorists, despite pleas from experts that it would only worsen the situation for everyone. 

Hours after Virginia's emergency declaration, Lether Kerney took an unexpected hit after pulling into a BP Gas station in Richmond. "It was a lot of people there, no one looked at the price," Kerney told a local CBS affiliate. 

Unaware the gas station was charging $5.99 per gallon, or twice the national average, Kerney spent double what she normally would. "I had half a tank of gas, so when it got to $25 I started looking to see what was going on. And after I got to $30, I was like, 'Oh my God! I spent $35.45 to fill up my tank. Six gallons of gas for $35. That's absolutely ridiculous."

In the Sunshine State, a rush to the pump led to local shortages, as Florida's gas supplies are mostly not impacted by the Colonial Pipeline closure. 

Florida residents were urged by Attorney General Ashley Moody not to hoard and to "only purchase gas when you need it." 

The plea was reportedly not heeded by at least one Hummer owner, whose vehicle burst into flames after its owner filled up four, five-gallon containers of gas at a station Wednesday in Florida's Citrus Country. 

In addition to concerns that hoarding would only exacerbate fuel shortages, one federal regulatory agency advised against related risky behavior. The U.S. Consumer Product Safety Commission issued a series of cautionary tweets on Wednesday, including one advising against filling plastic bags with gasoline. Another urged folks to let others know it's dangerous to use "containers not meant for fuel to get gas."

—The Associated Press contributed to this report.