After Ike, How Far Up Will Gas Prices Go?

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This weekend, Hurricane Ike plowed through the Houston area -- a region that is the center of the nation's energy industry and accounts for about one-fifth of our petroleum refining capacity.

Federal officials are in the process of determining the full extent of the damage, but say it appears ike destroyed at least 10 oil and gas platforms in the Gulf of Mexico and damaged some pipelines.

That's only a fraction of the 3,800 production platforms in the gulf. Still, drivers are concerned.

If the damage assessment is higher, that could cause already soaring prices at the pump to jump even more.

"You've got supplies at the lowest level they've been in many years, and at the same time you have a surge in demand ahead of a storm," explained Alaron Trading Corp. energy analyst, Phil Flynn.

Concerns over fuel shortages caused wholesale gasoline prices on the Gulf Coast to surge into record territory to around $4.85 a gallon.

Wholesale prices are what refineries charge retailers. To make a profit, retailers then mark up those prices, which can mean a lot of pain at the pump. Experts say the retail price is generally 60 cents higher than wholesale. With wholesale prices around $5 a gallon, that could mean what you pay is well above the July 17 record of $4.11 a gallon.

Some people are already paying well above that record. And gas shortage concerns may not go away soon.

More than a dozen Gulf Coast refineries are shut down because of Ike, and could remain that way for more than a week. Stalled production has fueled the spike in gas prices.

Are we on our way to paying as high as $8 a gallon like some European countries like Norway and the United Kingdom? How high gas prices go could depend on exactly how much damage Ike caused.

But government leaders say don't panic. There are other sources of oil and gas besides the Gulf Coast.

"We also get supply from Canada [and] from other places," Michigan Gov. Jennifer Granholm said. "There has been increased effort to get supply from Europe."

Ike also led the Department of Energy to release more than 300,000 barrels from its strategic reserves to help keep prices from rising even more.

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