Hurricane Milton drives gas demand in Florida, with 16% of stations out of fuel

By Myra P. Saefong

GasBuddy says 43% of gas stations in Tampa/St. Petersburg are out of fuel

Hurricane Milton is one of the Atlantic Basin's strongest storms on record and the frenzy of evacuations in Florida, where it's expected to make landfall Wednesday evening, has led to shortages at nearly 16% of the gasoline stations in Florida, according to GasBuddy.

Fuel shortages were seen at 15.79% of the state's gas stations, or 7,912 stations, as of 11:10 am Eastern time Tuesday, according to GasBuddy, a source for real-time fuel prices at gas stations in the U.S., Canada, and Australia.

It's tough right now for evacuees, Patrick De Haan, head of petroleum analysis at GasBuddy, told MarketWatch. Hundreds of thousands, if not millions, of Floridians are trying to head north on the two major highways so it's a bit of a "challenging situation."

The most shortages in the state were seen in the Tampa/St. Petersburg area with around 43.06% of those gas stations without fuel, GasBuddy reported Tuesday. The Fort Myers/Naples area had 27.79%, and Gainesville 24.71%, of stations out of fuel.

Data from GasBuddy show that during past emergency declarations for storms, the number of gas stations without fuel tends to reach its peak anywhere from day 4 to day 7 after the emergency declaration. President Joe Biden approved an emergency declaration for Florida on Tuesday.

For those in search of fuel, particularly in Florida right now, De Haan said motorists should try to target freeway exits or areas that have large travel stops - ones that have more resources to deliver that fuel on a timely basis, he said.

Demand for fuel tends to spike sharply ahead of big storms - and Milton, which intensified to as high as a Category 5 hurricane on Monday, with maximum sustained wind speeds reportedly near 180 miles per hour, is a monster.

On Tuesday morning, it was downgraded to a Category 4, but National Hurricane Center expects it to remain an "extremely dangerous hurricane through landfall in Florida" Wednesday night.

"The biggest issue right now is availability of gasoline and the logistics," said Denton Cinquegrana, chief oil analyst at the Oil Price Information Service (OPIS), a subsidiary of MarketWatch publisher Dow Jones.

The region was still dealing with the impact of Hurricane Helene, which made landfall on the Florida Gulf Coast on Sept. 26, he said. All the ports, such as Tampa, Fort Meyers, Manatee, St. Petersburg have all closed, he said. "So no more deliveries of fuel can be made."

Still, with no refineries in the path of Hurricane Milton, this has been seen as a "demand event" for gasoline, said Cinquegrana.

In the past, demand spikes ahead of storms and then demand drops sharply during and immediately afterward, he said.

Hurricane Ian in 2022 had a similar path as Milton, said Cinquegrana. Ian made landfall on Florida's western coast in late September 2022.

The chart above shows Florida's gasoline demand jumped 16.7% for the week ending Sept. 24, 2022, compared with the week before, Cinquegrana said. Then, the week of Oct. 1 saw week-on-week demand drop by 17.8%.

This year, Milton may be a "significant demand destruction event," said GasBuddy's De Haan.

"There's a net negative to demand," even with the surge in demand seen ahead of a storm, because there's little demand after such a storm, he said.

The amount of destruction from the hurricane will depend on its strength at landfall, so the larger the storm, the more it will "probably destroy demand on the backside," De Haan said.

In terms of infrastructure, such as oil platforms and refineries, he said there's likely to be only a "minimal impact."

Port Tampa remains a key concern - if it takes a direct hit, he said. That's the primary port for Tampa to get supplies into the market, which also flow into Orlando.

Overall, the average nationwide price for gasoline stood at $3.168 a gallon Tuesday afternoon, according to GasBuddy. That's down 5.2 cents a gallon from a month ago - and also 50.2 cents below prices from a year ago.

But De Haan expects the national average to go up again. They'll likely see an impact from the Middle East in the next week or two, he said. Oil prices fell on Tuesday, but remain higher month to date as concerns over potential disruptions to supplies in the region prevail.

By Thanksgiving, or maybe even earlier, the national average for gasoline could still fall below $3 a gallon, said De Haan. A drop in prices would be normal for this time of year, but we haven't seen a sub-$3 a gallon national average since 2021, he said.

The Florida Department of Transportation was unable to provide a comment on the spot, citing a high volume of queries, when MarketWatch reached out for comment on fuel availability in the state.

-Myra P. Saefong

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10-08-24 1439ET

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