Hurricane Sandy forcing wave of oil refinery shutdowns

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Hurricane Sandy forcing wave of oil refinery shutdowns

Will East Coast see spike in gas prices?

This is a rush transcript from "Your World," October 29, 2012. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF "YOUR WORLD": Also, refineries along the East Coast shutting down, one after the other.

Former Shell Oil president John Hofmeister on that in Houston, Texas.

What does this mean? And how widespread will this be, John?

JOHN HOFMEISTER, FORMER SHELL OIL CEO: Well, if you start south, Neil, there's no real problem for Virginia all the way up to about Baltimore, because they are supplied by Gulf of Mexico pipelines.

So, there's no problem with distribution, other than if the electricity's out, retail gas stations can't pump gas. Down in Florida, gas stations are required to have generators for just this kind of a reason, but that law doesn't exist except in Florida. As you north into Pennsylvania, New York, Connecticut, et cetera, the fact that the refineries are shut down is not the problem, because there should be about three to four weeks of inventory on hand. The real problem is the distribution.

If the highways are closed, as you just said, you can't distribute. If the retail stations don't have electricity, they can't pump for the retail customer. You're likely to see a spike in price, at least temporarily, until things get back to normal, when I think prices will generally come back to the normalcy.

But the real issue here is people will be reminded how essential gasoline is to everyday life. And when you can't get it that's the availability issue. When can't get it, you panic. When you panic, you'll go anywhere to get a tank of gas. That will lead to gas lines.

That will lead to a lot of people getting very, very unfriendly with one another, because, when it's scarce, people are desperate, they'll do strange things. So, this is not a good scene, Neil.

CAVUTO: All right, it is not, indeed.

John Hofmeister, thank you very, very much.

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