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Gas price spikes and shortages coming after fatal pipeline blast

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NEW YORK — A fatal explosion along a crucial gasoline pipeline Monday could cause widespread gasoline shortages in the Southeast United States and result in higher prices up and down the East Coast.

“You have basically ruptured the aorta of East Coast gasoline supplies,” said Tom Kloza, chief oil analyst with the Oil Price Information Service, which tracks prices for AAA.

Spot gasoline futures spiked 13 cents a gallon in early trading Tuesday. “Increases at the pump will happen fairly quickly,” said Kloza.

The Colonial Pipeline, which runs from refineries in Houston all the way to terminals in New Jersey, ruptured Monday when an Alabama construction crew in Shelby County, Alabama hit it with a trackhoe. That caused an explosion that killed one worker, injured five others and sent a massive plume of flames and smoke into the sky. It’s the second time the pipeline has been shut down in the last two months.

In the massive underground interstate system that is the nation’s pipeline network, the Colonial Pipeline is I-95, providing an irreplaceable pathway for more than 100 million gallons of gasoline and other refined products a day.

The pipeline’s previous shutdown in September, after workers discovered an underground leak, only stopped the flow in one of the two pipelines that carry the gasoline. This accident has closed both pipelines, meaning the problem will be more widespread.

“From where we sit right now, with both lines down, it could be worse than September,” said Tamra Johnson, spokesperson for AAA. At the time, prices in the Southeast spiked as much as 28 cents a gallon.

This time the price hikes could reach all the way to New York and New Jersey, which were spared higher prices in September thanks to alternative supplies in the region. The increases will come on top of a 23-cent a gallon state gas tax increase which went into effect in New Jersey on Tuesday.

It’s doubtful that the the Northeast will be hit with the shortages that are likely to return to the Southeast. But Kloza said there are concerns that the shutdown could last longer this time, perhaps weeks instead of the 11 days it was closed in September.