Gas Pains

This is a partial transcript of "The Big Story With John Gibson," August 31, 2005, that has been edited for clarity.

JOHN GIBSON, HOST: One of the problems resulting from Hurricane Katrina (search) is going to be gas shortages. You see that sign: $4.09 a gallon for the most expensive stuff. We actually have seen fighting breaking out in and around New Orleans over gas.

And there's a picture from Atlanta. The BP (search) station across from the Chevron is charging $5.57 a gallon. That is in Atlanta as a result of Hurricane Katrina.

Joining us now to talk about what's going on is John Kilduff, senior vice president of FIMAT Energy Risk Management.

So can you explain why Atlanta is showing up with $5.57 a gallon?

JOHN KILDUFF, FIMAT ENERGY RISK MANAGEMENT: They're starting to run out of gasoline there, John. Retailers, both the flag stations as you're seeing there, and the independents, are having trouble keeping it supplied.

Also in the Gulf Coast, where there is gasoline to be bought, we're seeing it trade at the wholesale level at over $3 a gallon because of these shortages.

GIBSON: Well, if it's a supply problem, when trucks get in there the price should go down.

KILDUFF: No, those trucks are reflecting a commodity whose preciousness is priced in all the time. And that might be the last truck pulling into that station for some time, John. And what's that gallon worth? What's that last gallon worth? That's what is getting priced throughout the system right now.

GIBSON: But is Atlanta just an aberration, or are we going to see this everywhere?

KILDUFF: It's starting to work its way up. The next two days are going to be critical in terms of determining whether or not, on a gasoline price basis, especially, this turns out to be a 1970s style price shock, for the eastern two-thirds of the country, at least.

GIBSON: All right, we're looking just to show people I wasn't kidding, there's the highest price stuff, $6 and something cents per gallon there at what I think is a BP station outside of Atlanta.

What do you mean by a price shock? What should we expect to see in the northeast, for instance, or for that matter, Los Angeles, where people depend so much on driving?

KILDUFF: They're clearly pricing that gasoline to keep people away and to keep whatever they have left in the tank.

GIBSON: They don't want customers?

KILDUFF: They don't want customers at that price. And I think what we're going to start bumping up against in the next couple of days is, you might not even be able to get gasoline. Maybe the states may have to impose rationing. And the prices will go that high to quell the demand and allow the system to rebuild. That's part of a tactic that they can employ to keep people out of their stations and they can rebuild supplies.

GIBSON: John Kilduff, giving us an idea of what's going on with gasoline and energy in the aftermath of Katrina. John, thanks very much.

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