The governors of Florida, Georgia, South Carolina and North Carolina have declared states of emergencies in preparation for Hurricane Matthew, which is expected to hit the east coast of Florida on Friday.
The declarations of emergency trigger suspensions of federal hours of service requirements and certain weight restrictions for motor fuel carriers, and also trigger anti-price gouging laws. Because the market is already fully transitioned to winter grade gasoline, no Reid Vapor pressure (RVP) waivers are necessary. None of the effected areas are subject to reformulated gasoline (RFG) requirements.
In Florida, Gov. Rick Scott declared a state of emergency for every county in the state due to the severity of Hurricane Matthew. The U.S. Coast Guard has closed South Florida terminals and facilities. Ports in Georgia, South Carolina, and North Carolina are preparing to close as well.
Although waterborne products deliveries may be halted, NATSO members are advised that demand generally drops dramatically during a hurricane. Florida has approximately six days' worth of fuel supply, even if all ports close, meaning dramatic supply disruptions are unlikely absent a particularly serious weather event. It is further noted that the southeast United States fuel markets are still recovering from the brief supply disruption in recent weeks caused by a leak in the Colonial Pipeline.
Under emergency declaration in Florida, it is unlawful to sell essential commodities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency, unless the seller can justify the price by showing increases in its prices or market trends. Motor fuel is considered an essential commodity.
In Georgia, Gov. Nathan Deal declared states of emergency for 13 counties. Violators of Georgia's price-gouging laws -- which prohibits price increases that do not accurately reflect an increase in the cost of new stock or transport of a product, plus the retailer's average markup percentage applied during the tend days immediately prior to the declaration of emergency -- can be fined from $2,000 to $15,000.
In North Carolina, Gov. Pat McCrory on Oct. 3 declared a state of emergency for central and eastern parts of the state, and suspended certain motor vehicle regulations to ensure the restoration of utility services and the transportation of essentials. The state’s price gouging law has been triggered; it imposes fines of $5,000 per violation for a price that is “unreasonably excessive” upon declaration of a state of disaster. North Carolina is currently investigating nine gas stations and one gas wholesaler for alleged price gouging reported by consumers in September.
South Carolina governor Nikki Haley declared a state of emergency suspending hours of service and certain weight limitations for vehicles on interstate highways. She also suspended certain requirements relating to registration, permitting, length, width, and weight for commercial vehicles responding to an emergency. South Carolina's price gouging law is a general prohibition of "unconscionable" prices during times of disaster. It is punishable by fines and up to 30 days in jail.
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