Trouble down the pipe has stations on empty

Signs saying “Sorry, Out of Fuel” greeted motorists at some Diamond Shamrock gas stations Tuesday, a repercussion of a Feb. 16 explosion and fire at a Texas refinery that supplies the Pikes Peak region.

Valero Energy Corp.’s McKee Refinery is shut down for repairs, said spokeswoman Mary Rose Brown. “We have about 1,000 contractors in the plant assisting in this effort every day,” she said.

She declined to say how many of the 30 Diamond Shamrock stations Valero operates in the region are completely out of gas. A check by The Gazette found seven stations out of fuel Tuesday, three with all pumps working and the remainder lacking some grades.

Of about 200 stations in the region, other brands had gasoline available, according to Richard Strah, operations manager for Acorn Petroleum, a Colorado Springs fuel distributor.

Brown said she expects the refinery to resume partial operations in early April, but the outages at Springs gas stations should be “completely resolved by next week.”

“We’ve been working very hard to purchase supply from other terminals to meet our needs,” she said. “We are supplying our network as quickly as possible.”

To retain customers, Valero is lowering prices on the fuel stations have left.

“So if we run out of regular gasoline but have midgrade, we’ll sell the midgrade fuel for the regular price,” Brown said. “If we run out of midgrade but have premium, we’ll sell premium for the midgrade price.”

Some of the 130 Diamond Shamrock stations in Denver also are out of fuel, Brown said, but the shortage is less severe than in the Springs.

The interruption in fuel supply is a double whammy to the market, said Bryant Gimlin, energy-risk manager at Denverbased wholesale distributor Gray Oil Co.

Oil refineries usually partially shut down operations in the spring for routine maintenance, he said, further reducing fuel supply.

“Less supply in the area will impact prices,” he said. “Our costs at the wholesale level have been on an upswing since the McKee Refinery went down in February.”

Regular unleaded gasoline in the Springs averaged $2.52 a gallon Tuesday, according to AAA Colorado, up from $2.16 a month ago.

Colorado has had product shortages since last month’s refinery accident, but not total outages until now, Strah said.

“Diesel is more scarce than gas right now,” he said, “and there are outages of premium and midgrade levels because the product is more costly to produce.”

Warmer weather also has increased consumer demand for fuel, said Eric Escudero, spokesman for AAA Colorado.

“Normally demand increases significantly in April, not March,” he said, “which is why we’ve seen gas prices rise so much higher than their low point Jan. 31, when Colorado’s average price per gallon for regular unleaded was $2.09.”

Motorists should keep in mind that other stations have gas, Escudero said.

“Even though supplies are tight across the country now, there’s still plenty of gas,” he said. “So there’s no reason to panic buy.”