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Tucson gasoline runs dry, boosting South Arizona rack prices nearly 9 cents/gal

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Tucson gasoline runs dry, boosting South Arizona rack prices nearly 9 cents/gal

Houston — Southern Arizona rack gasoline jumped nearly 9 cents/gal Tuesday on a shortage that left some Tucson retail locations without fuel and which is expected to last several more days.

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According to rack prices published by DTN, an unbranded gallon of 87-unleaded at Tucson rose 8.79 cents to $2.2479/gal Tuesday night, with the rise driven by a shortage that has emerged during the transition to summer-grade gasoline.

Meanwhile, Phoenix rack gasoline rose 5.64 cents to $2.2575/gal Tuesday night, DTN data showed.

The Arizona market is supplied by refiners in Los Angeles, New Mexico and West Texas.

Tucson media reported that a handful of Circle K stations in Tucson had turned away drivers after running dry. Radio station KTAR posted on social media photos of pumps sheathed in yellow plastic.

"Circle K is experiencing fuel outages across Arizona due to a perfect storm of unforeseen circumstances including isolated issues with its pipeline, refinery supply source and ethanol distribution," the company said. "The situation has been exacerbated by the customary fuel blend change at this time of year and high fuel demand due to spring break."

Last week's winter storm that struck the Midwest wreaked havoc on the US ethanol industry.

Floods and heavy snowfall rendered several rail lines impassable, making ethanol deliveries impossible. This particularly affected markets in the Western US, with one source telling Platts last week: "Western markets are in danger everywhere."

Circle K operations vice president Tim Tourek said the company was working with suppliers to obtain gasoline for short markets and that the shortage is expected to last several days.

Prices released by Mexico officials show that retail gasoline in Sonora along the Arizona border remains well above the Arizona rack. Recent prices in San Luis Rio Colorado ranged from $2.98/gal to $4.11/gal. Prices in Agua Prieta ranged from $3.29/gal to $3.38/gal.

--Jeffrey Bair, jeffrey.bair@spglobal.com

--Wesley Swift, wesley.swift@spglobal.com

--Silvia Struthers, silvia.struthers@spglobal.com

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com