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Effects of the Colonial Pipeline Hack on the Price of Gas

On May 7th the Colonial Pipeline, a major source of fuel and refined petroleum for the southeast, running from Texas and up through the East Coast, halted its operation temporarily in response to a cyberattack. The massive disruption in the market led to a supply shortage exacerbated by panic buying consumers. Scenes of customers waiting in long lines to fill up not only their cars, but also personal containers, offered anecdotal evidence to assume prices would rise. As a result, the Cost of Living Index Team investigated the impacts the halt of fuel movement had on the price of gasoline, with a focus on the states directly affected by the pipeline closure. C2ER collected gas price data on four occasions during and after the crisis.

Between the initial data collection on May 12th, while the pipeline was still down and the final collection on May 21st, over a week after the pipeline came back online, the price of gas in the southeast rose by 1.9% on average, compared to a national average change of 1.2%. The average amongst areas outside of the southeast was 0.9% over the same period. As for when the greatest price change occurred, most price movement happened in the initial moments of the panic as the average change between May 12 and May 14 had the greatest jump while between the subsequent data pulls the price remained relatively the same.

Of the Metro/Micropolitan Statistical Areas (MSAs) with the largest change in price, three of the top five were in the southeast. Of the remaining top 5 MSAs, one was in West Virginia, and the other in Iowa. The West Virginia metro, Parkersburg-Vienna WV Metro, had the highest change in price over time.

The 5 MSAs with the largest change in gas price between May 12th and May 21st 

Areas considered in the Southeast were determined by having direct access to the central pipeline as highlighted on the EIA’s map (https://www.eia.gov/todayinenergy/detail.php?id=47917). The included regions were Alabama, DC, Delaware, Georgia, Louisiana, Maryland, Mississippi, New Jersey, North Carolina, South Carolina, Texas, Virginia, Tennessee. Gas data was collected from AAA (https://gasprices.aaa.com/).