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Fuel supplies tighten as pipeline outage enters fifth day

Posted On: May. 11, 2021 10:38 AM CST


(Reuters) — Supplies of gasoline tightened further in parts of the United States on Tuesday as the shutdown of the nation’s biggest fuel pipeline by hackers entered its fifth day, raising concern about price spikes at the pumps ahead of the summer driving season.

The Colonial Pipeline said it was working toward a substantial restart of operations by the end of this week after a cyberattack forced it to cease operations on Friday, choking off nearly half of the East Coast's fuel supply and underscoring the vulnerability of U.S. energy infrastructure to hackers.

Gas stations from Florida to Virginia began running dry and prices at the pump jumped on Tuesday amid panic buying by motorists.

About 7.5% of gas stations in Virginia and 5% in North Carolina had no fuel on Tuesday as demand jumped 20%, tracking company GasBuddy said. Georgia suspended sales tax on gas until Saturday to ease the strain on consumers. North Carolina declared an emergency.

The strike on Colonial “is potentially the most substantial and damaging attack on U.S. critical infrastructure ever,” Ohio Senator Rob Portman told a Senate hearing on cybersecurity threats on Tuesday.

The FBI has accused a shadowy criminal gang called DarkSide of the ransomware attack. DarkSide is believed to be based in Russia or Eastern Europe and avoids targeting computers that use languages from former Soviet republics, cyber experts say.

Russia’s embassy in the United States on Tuesday rejected speculation that Moscow was responsible for the attack.

President Joe Biden on Monday said there was no evidence thus far that Russia’s government was involved but said there was evidence that the culprits’ ransomware was in Russia.

Ransomware is a type of malware designed to lock computers by encrypting data and demanding payment to regain access.

A statement issued in DarkSide’s name on Monday said: “Our goal is to make money, and not creating problems for society.”

It is unknown how much money the hackers are seeking, and Colonial has not commented on whether it would pay.

The top U.S. energy regulator issued a call Monday for mandatory cybersecurity standards for pipeline operators. “Encouraging pipelines to voluntarily adopt best practices is an inadequate response,” said Federal Energy Regulatory Commission Chair Richard Glick.

Fuel supply disruption has driven gasoline prices at the pump to a three-year high and demand has spiked in some areas served by the pipeline as motorists fill their tanks.

National average pump prices are approaching their highest levels since May 2014, the American Automobile Association said. The association warned against hoarding, saying that thins supplies further.

If the disruption stretches on, fuel suppliers could ship by trucks and rail to make up for some of the shortfalls. The Department of Transportation on Sunday lifted driver restrictions on fuel haulers in 17 states affected by the shutdown.

Citgo Petroleum Corp. cut production at its 418,000 barrel-per-day Lake Charles, Louisiana, refinery, and Total reduced gasoline production at its 225,500 barrel-per-day Port Arthur, Texas, refinery due to the pipeline outage, sources told Reuters on Monday.

U.S. Gulf Coast refiners, including Marathon Petroleum, Valero Energy, Phillips 66 and PBF Energy, booked at least four tankers to store fuel off the Gulf Coast.