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Runs reported at Atlanta gas stations

Georgia governor declares price gougers will be punished




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ATLANTA, Georgia (CNN) -- News that two pipelines supplying the Southeast with gasoline were knocked out by Hurricane Katrina sparked runs on gas and a sharp spike in prices Wednesday in the Atlanta area.

Prices were reported above $5 per gallon at some Atlanta stations, and Georgia Gov. Sonny Perdue signed an order putting the state's price-gouging statute into play.

Perdue warned that violators "will be punished to the fullest extent possible."

Retailers violating the law could be fined up to $5,000 for each person they overcharge and up to $15,000 if the person is a senior citizen, Perdue spokesman Derrick Dickey told the Atlanta Journal-Constitution.

Perdue urged state residents to avoid hoarding fuel, which he said would make things worse ahead of Labor Day weekend.

"Let me be clear: This is a temporary problem due to Katrina and will be resolved soon -- not a cause for alarm or panic," Perdue said. "It is not a long-term situation."

Chance Pitts, owner of a filling station in Peachtree City, one of Atlanta's southern suburbs, said he limited sales at his Shell station to 10 gallons per customer after lines began to form Tuesday.

"What we've been told is the gas lines coming into Atlanta were damaged in the storm," Pitts said. "Most of them are taking it pretty well. They understand," he said.

Motorists in the Atlanta area reported stations charging more than $3 a gallon -- up sharply from the beginning of the week -- with some stations posting prices in the $5 range and up to $5.99 a gallon for diesel fuel. Some were running out of fuel by Wednesday's rush hour.

Outside one midtown Atlanta filling station, a passerby watching employees post signs for $3.29 per gallon regular shouted, "Gougers! We'll remember!"

In Decatur, on the east side of Atlanta, filling station proprietor Siraj Ali said lines of six to seven cars formed at his shop Wednesday afternoon.

Though regular unleaded was selling at $2.99, 40 cents higher than Monday, Ali said, "I have no limit, and people are waiting in line patiently."

"All these people are coming there, saying the people on the radio are saying we're going to be out of gas," he said.

"This is coming from the media. We are telling people no such thing."

North Carolina Gov. Mike Easley said pipelines that supply 90 percent of his state's gasoline have been knocked out Katrina, which slammed into the southeastern Louisiana oil patch Monday.

Most distributors have "a week or so of supply," Easley said in a statement issued from his office.

"We do not know the extent of the problem, but we do know that there will be a significant loss of gasoline in the Southeast -- at least in the short term, until the electricity is restored," he said.

One of two pipeline companies supplying gasoline to the Eastern Seaboard said Wednesday it hopes to be back in partial operation soon.

The other pipeline is still waiting for an indication on when electricity to pumps can be restored, a company spokesman said.

Tom Kloza, chief analyst for the private Oil Price Information Service, said the worst problems are expected in the Southeast, though some Ohio Valley markets may face problems as well.

Kloza said distributors who supply gasoline to filling stations face mounting concern.

Wednesday's announcement that the federal government will ease environmental rules on gasoline and diesel to allow for more supply is not enough for many of those suppliers, he said.

Easley asked North Carolina residents to conserve fuel, and said some filling stations were already running out.

He ordered all nonessential travel by state workers halted, and urged residents to carpool and avoid making any unnecessary trips.

"We are not out of gas, but we are running low," he said.

Alpharetta, Georgia-based Colonial Pipeline usually pumps more than 100 million gallons of fuel products each day from refineries and storage facilities in Texas and Louisiana to Georgia, the Carolinas and on to New York.

One pipeline carries mainly gasoline and a parallel line, also shut down, carries diesel fuel, home heating oil, jet fuel and military kerosene.

Another line, operated by Atlanta-based Plantation Pipeline, was also shut down.

That means distribution centers along the Eastern Seaboard are not being replenished, and it was not clear how much fuel those terminals had on hand.

"We've gone out and leased diesel generators in an effort to restart our line," said Steve Baker, a spokesman for Colonial Pipeline. "We hope to have it back up and running by this weekend."

A spokesman for Plantation, which usually pumps 26 million gallons of fuel each day from Louisiana north as far as Washington, D.C., said that while the pipeline was not damaged, there is no electricity to operate a pump station in Collins, Mississippi.

"While the line is still pressured up, until the pumps start up, there's no way to move the product," spokesman Rick Rainey said.

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