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    Fuel Shortage in South Dakota

    Shutdown in area refineries causes spike in local prices.

    YANKTON, S.D. -- Filling the gas tank may cost a little more in South Dakota the next couple of weeks. The reason: the pump is dry.

    The terminals that supply gasoline to the Yankton, S.D., market and surrounding region are experiencing severe shortages of both unleaded and diesel fuel, due to the harvest season and shutdown oil refineries, the Yankton Daily Press & Dakotan reported.

    "There are a lot of shortages in number-two diesel, unleaded and fuel-grade diesel," said Harold Wuesteweld of H&K Oil Co. Wholesale in Yankton. "When the terminal's out, every gas station is out, too."

    Gasoline supplies have been tight in the area for about a month, he said. Short supply is not unusual because of high farmer demand during the corn and soybean harvest seasons. But the prices spiked upward 14 cents in Yankton Tuesday. The average price for fuel Thursday was $1.61.

    "Price increases signify that there is a shortage in gasoline in the area," said Joann Shore, oil market analyst for the Department of Energy in Washington, D.C. "The shortage is usually quickly relieved and the prices stabilized."

    But don't expect area gas prices to drop anytime soon. Several terminals that supply the area's gasoline have run out of fuel.

    "The terminal is dry. Gas stations go and look for fuel at another terminal, and find out that terminal has the same problem," Wuesteweld said. "Sioux City, Sioux Falls, everybody is out. Yankton trucks it in from Sioux Falls when that terminal gets some product in."

    Area terminals are looking as far away as Illinois, Kansas and Oklahoma for extra supply, said Ron Ness of the South Dakota/North Dakota Petroleum Council in Bismarck, N.D.

    But these sources may not be as rich with gasoline as South Dakota would hope. Other regions are looking to the Midwest for help, including the Great Lakes and East Coast.

    The gas stations and terminals are blaming oil refineries for the tight supply. Many refineries have stopped production to modify their fuel's sulfur concentration to comply with a new federal law to be in place by January 2004, said Ron Lamberty, executive director of the American Coalition for Ethanol in Sioux Falls.

    Normally, refineries store up enough gasoline to maintain adequate supply during their month-long shutdowns, but sometimes the inventories don't hold out as long as intended, Shore noted. Because multiple refineries are off-line and out of stored fuel, the effect on gasoline supplies and prices is extreme.

    "And all this comes in a season that already sees a lower gasoline supply -- harvest," Lamberty said.

    Shore said the prices will probably be high for several weeks.

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