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The effect of the Colonial Pipeline shutdown on gasoline prices

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  • Tsvetanov, Tsvetan
  • Slaria, Srishti

Abstract

On May 7, 2021, the Colonial Pipeline system was shut down for 6 days in response to a cyberattack. Using daily regular gasoline price data at the city level and employing a difference-in-differences approach to address potential demand-side confounding factors, we find that the shutdown led to a 4 cents-per-gallon increase in average gasoline prices in affected areas, with the estimated impact varying across locations based on their access to alternative means of fuel supply. Although the overall effect was initially slow, it persisted even after the reopening of the pipeline.

Suggested Citation

  • Tsvetanov, Tsvetan & Slaria, Srishti, 2021. "The effect of the Colonial Pipeline shutdown on gasoline prices," Economics Letters, Elsevier, vol. 209(C).
    • Handle: RePEc:eee:ecolet:v:209:y:2021:i:c:s0165176521003992
    DOI: 10.1016/j.econlet.2021.110122
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    References listed on IDEAS

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    Cited by:

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    4. Sanctuary, Mark & Fagerström, Anton & Feiz, Roozbeh & Lönnqvist, Tomas & Lindfors, Axel, 2024. "The fuel security and climate policy nexus," Working Paper Series in Economics and Institutions of Innovation 501, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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    More about this item

    Keywords

    Gasoline prices; Supply disruption; Colonial Pipeline;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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