The Impact of Harvey from the View of a Central Texas Fuel Distributor
The Impact of Harvey from the View of a Central Texas Fuel Distributor
The article below is meant to provide a look at one companies perspective of the current fuel supply chain, and only reflects the current fuel supply situation in the central Texas market. Experiences in other Texas markets will vary.
The Texas Food & Fuel Association (TFFA) continues to work with its fuel distributor members to gauge the impact Hurricane/Tropical Storm Harvey has had on their business operations. First-hand accounts are invaluable in determining how companies who supply gas stations with fuel perceive the current strain on the supply chain.
We spoke with one central Texas fuel distributor who sells fuel to over 100 customers, of which roughly 60% are located in Austin.
During the conversation the representative stated that Austin is fairing much better than other parts of the state primarily because the refinery that services central Texas through a direct pipeline is located in Corpus Christi. Refineries in Corpus Christi suffered less water damage than in Houston, and as a result, many have already begun the restart process.
The central Texas fuel distributor we interviewed is committed to working through the holiday weekend to fulfill their customers’ needs. In fact, they are already at roughly 100% allocation to all of their customers.
However, the problem they are facing is the rate in which motorists are consuming fuel. Major oil companies issue allocations to aid fuel flow for distributors as they drop off fuel to their contracted customers, a process that resets at midnight. Trucks then head to fuel terminals — what some refer to as a gas station for gas stations — and begin delivering fuel. Due to the recent panic-buying frenzy that has taken consumers by storm, stores that this fuel distributor supplies are running out at rates they have never seen before.
By their estimate, the demand to allocation ratio is at least 3:1. Should motorists continue to consume fuel at this rate, trucks will begin to travel extended distances to outside terminals in order to keep up with demands in central Texas.
There is good news for drivers looking for fuel in and around Austin. Gas stations serviced by this company will receive 100% allocation by tomorrow morning which should last through the weekend if drivers maintain their normal driving behavior.
The Texas Food & Fuel Association (TFFA) continues to work with its fuel distributor members to gauge the impact Hurricane/Tropical Storm Harvey has had on their business operations. First-hand accounts are invaluable in determining how companies who supply gas stations with fuel perceive the current strain on the supply chain.
We spoke with one central Texas fuel distributor who sells fuel to over 100 customers, of which roughly 60% are located in Austin.
During the conversation the representative stated that Austin is fairing much better than other parts of the state primarily because the refinery that services central Texas through a direct pipeline is located in Corpus Christi. Refineries in Corpus Christi suffered less water damage than in Houston, and as a result, many have already begun the restart process.
The central Texas fuel distributor we interviewed is committed to working through the holiday weekend to fulfill their customers’ needs. In fact, they are already at roughly 100% allocation to all of their customers.
However, the problem they are facing is the rate in which motorists are consuming fuel. Major oil companies issue allocations to aid fuel flow for distributors as they drop off fuel to their contracted customers, a process that resets at midnight. Trucks then head to fuel terminals — what some refer to as a gas station for gas stations — and begin delivering fuel. Due to the recent panic-buying frenzy that has taken consumers by storm, stores that this fuel distributor supplies are running out at rates they have never seen before.
By their estimate, the demand to allocation ratio is at least 3:1. Should motorists continue to consume fuel at this rate, trucks will begin to travel extended distances to outside terminals in order to keep up with demands in central Texas.
There is good news for drivers looking for fuel in and around Austin. Gas stations serviced by this company will receive 100% allocation by tomorrow morning which should last through the weekend if drivers maintain their normal driving behavior.
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