(Bloomberg) — Marathon Petroleum Corp.’s oil refinery near New Orleans exploded into flames on Monday, threatening to crimp fuel supplies and raise pump prices at a time of already rampant inflation.
The company’s Garyville, Louisiana, plant is one of the nation’s largest and a key supplier of gasoline, diesel and other fuels. Marathon said five people were injured. The blaze that started around 9:30 a.m. local time was declared extinguished about 4 1/2 hours later.
The fire occurred in a hydrocracker, according to a person familiar with the operation, a crucial price of equipment that breaks heavy petroleum molecules down into lighter products such as diesel. If any damages are significant enough to halt production at the Garyville complex, regional fuel supplies may be stretched.
Benchmark gasoline futures rose 1.6% on news of the fire. Demand has been on the rise at a time when more than 10% of Gulf Coast refining capacity already is idle for repairs and other maintenance work.
Retail gasoline prices have climbed 7.5% this year, adding to 2021’s 46% advance, according to AAA. The last time prices were this high was the summer of 2014, when international oil prices were above $100 a barrel.
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