Philadelphia-area refinery shutdowns may increase the price volatility of gasoline and other petroleum products, according to a new report from the Energy Department.
Sunoco Inc. and ConocoPhillips have idled two local plants and plan to shut a third that together can process more than 700,000 barrels a day of oil, or about 46 percent of the Central Atlantic and New England region's refining capacity.
Gasoline prices may rise above $4 a gallon next summer because of the closures, Edward Morse, New York-based head of commodities research at Citigroup Global Markets Inc. said Thursday. The average national price Friday was $3.22 a gallon, AAA said.
The closures increase the dependence on imports to meet fuel demand in the region that includes the delivery point for New York Mercantile Exchange futures contracts, the basis for national prices at the pump.
Longer delivery times and potential transportation bottlenecks may lower short-term product supply flexibility, the department said in the report by its Energy Information Administration.
Diesel and jet fuel supplies could also be affected, according to the study.
Sunoco announced Dec. 1 the immediate idling of its 194,000-barrel-a-day Marcus Hook refinery. ConocoPhillips stopped processing crude oil at the 190,000-barrel-a-day Trainer plant Sept. 30.
Sunoco has a July deadline for selling or shutting its 355,000-barrel-a-day Philadelphia plant, the company said.
Read the Energy Dept. report on refining capacity at www.philly.com/refine