Philadelphia refinery shutdown could raise gas prices in Northeast

Largest oil refinery on East Coast closing

By Michelle Lou, CNN
CNN Money

(CNN) - Gas prices in the northeast could rise after Philadelphia Energy Solutions announced it's closing the largest oil refinery on the East Coast.

The company announced the decision after the refinery erupted into a massive fire and explosion last week. It's the 10th largest refinery in the US and refines about 335,000 barrels of crude oil a day, according to the company's website.

AAA spokeswoman Jenifer Moore said the closure of the largest oil refinery on the East Coast will likely have an impact on gas prices in and around the region.

"While it is too early to know how much prices could increase and for how long, motorists in the region will likely continue to see a fluctuation in pump prices -- especially leading up to the busy Fourth of July travel period," Moore said in a statement.

The fire has made it "impossible" to continue operations, CEO Mark Smith said in a statement. At least 1,000 workers will lose their jobs.

"Today, Philadelphia Energy Solutions made the difficult decision to commence shutdown of the refining complex. While our teams include some of the most talented people in the industry, the recent fire at the refinery complex has made it impossible for us to continue operations," Smith said.

"We are grateful that the fire resulted in only a few minor injuries. I want to thank our employees for their hard work and dedication and to thank the Philadelphia community for their support. We are committed to an orderly process to safely wind down our operations."

The company plans to sell the refinery complex, Smith added.

 

Mayor addresses loss of jobs

 

Philadelphia Mayor Jim Kenney said he was "extremely disappointed for the more than one thousand workers who will be immediately impacted by this closure, as well as other businesses that are dependent on the refinery operations."

The city plans to support the workers and will convene a group to discuss the economic and employment impact of the refinery's closure, Kenney said.

PES Holdings, a unit of Philadelphia Energy Solutions and owner of the refinery, has experienced some financial challenges in the past. It filed for bankruptcy in January 2018. Though it emerged from bankruptcy eight months later after restructuring debt, filings show it still faces challenges.

 

Authorities still investigating cause of explosion

 

The fire started with an explosion on June 21 from a vat of butane and propane, eventually engulfing the refinery and raising air quality concerns.

It wasn't extinguished until the following afternoon.

Five people suffered minor injuries in the incident. Authorities are still investigating the cause of the explosion.

CNN's Kate Trafecante and Carma Hassan contributed to this report

The-CNN-Wire ™ & © 2019 Cable News Network, Inc., a Time Warner Company. All rights reserved.