U.S. Capital Running Out of Gas, Even as Colonial Pipeline Recovers

By Stephanie Kelly

NEW YORK, May 14 (Reuters) – The U.S. capital was running out of gasoline on Friday, even as the country’s largest fuel pipeline network ramped up deliveries following a cyberattack and Washington officials assured motorists that supplies would return to normal soon.

The six-day Colonial Pipeline shutdown was the most disruptive cyberattack on record, demonstrating how vulnerable vital U.S. infrastructure is to cybercriminals.

Widespread panic buying continued two days after pipeline network restarted, leaving filling stations across the U.S. Southeast out of gas even in areas far from the pipeline.

U.S. pump prices are at their highest in years, two weeks before the peak summer driving season kicks off, with traffic growing after the pandemic. The average national gasoline price has climbed to almost $3.04, the most expensive since October 2014, the American Automobile Association said.

On Friday gas station outages in Washington, D.C., climbed to 87%, from 79% the day before, tracking firm GasBuddy said. President Joe Biden assured motorists supplies should start returning to normal by this weekend.

“Most of these states/areas with outages have continued to see panicked buying, which is likely a contributing factor to the slow-ish recovery thus far,” said GasBuddy’s Patrick De Haan. “It will take a few weeks.”

Colonial Pipeline announced late Thursday it had restarted its entire pipeline system linking refineries on the Gulf Coast to markets along the eastern seaboard.

Some states experienced modest improvements but still had a lot of gasoline outages. About 70% of gas stations in North Carolina were without fuel, with outages in around 50% of stations in Virginia, South Carolina and Georgia.

The hacking group believed responsible for the attack, DarkSide, said it had hacked four other companies including a Toshiba subsidiary in Germany.

Colonial Pipeline, owned by pension funds, private equity and energy firms, has not determined how the initial breach occurred, a spokeswoman said on Thursday. The company has focused on cleaning its networks, restoring data and reopening the pipeline.

Colonial has not disclosed how much money the hackers were seeking or whether it paid. Bloomberg News reported that it paid nearly $5 million to hackers.

Four states and federal regulators relaxed restrictions on fuel truck drivers to speed deliveries of supplies. Washington also issued shipping waivers to U.S. refiners Valero Energy Corp and Citgo Petroleum to move gasoline and diesel from the U.S. Gulf Coast to East Coast ports on foreign-flagged vessels. The U.S. normally limits deliveries between domestic ports to U.S.-built and crewed vessels.

Gulf Coast refiners that send fuel to market through the Colonial Pipeline have cut production because they have been unable to move gasoline, diesel and jet fuel through the pipeline. A smaller, alternative pipeline filled to capacity quickly after Colonial shut its network last Friday.

“Imports are likely to increase from Europe to offset the shortfall but will take time to arrive,” said Chris Midgley at S&P Global Platts. (Reporting by Stephanie Kelly; additional reporting by Jessica Resnick-Ault and Joseph Menn; Editing by Simon Webb, Steve Orlofsky and David Gregorio)

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