A jump in gas prices is expected tomorrow as Hurricane Katrina?s impact on about ten percent of US refinery capacity siphons down to local pumps.

While the final price for gasoline will be set by the Bermuda Government mid-week and nothing is for certain in the ever changing world of crude oil prices, David Rose, oil products manager for the Shell Company of Bermuda, said that as it stands now global gas prices have obviously been impacted by devastation in the US.

?We?re at the mercy of what is going on outside of Bermuda, we can?t escape it and everyone is feeling the effect,? he said. ?

Government sets the gas rate on a monthly basis some five days after Shell and Esso submit the prices they have paid to purchase fuel in the Caribbean region. The pump price is based on averaging the prices from the two companies and currently stands at $6.01 per gallon for premium-grade gasoline. While the price in England and Europe is even higher, the average US pump price for regular-grade gasoline was $3.018 a gallon on Thursday. Even so, the US Energy Department reported that gasoline consumption dropped 4 percent in the week ended September 2 as American?s balked at their version of higher prices. The highest average price in the US on Thursday was $3.337 in Washington D.C. That was offset by prices of less than $2.72 in Louisiana and Mississippi. Prices averaged $3 to $3.05 a gallon in states including Illinois, Indiana, South Carolina and Tennessee, according to the AAA.

Mr. Rose cautions against comparing American gas prices to those paid in Bermuda however as the United States quotes prices for the lowest grade of gas, 87 octane or regular gas while Bermuda?s gas is premium or 98 octane. The possible increase at Bermuda?s pump this week follows however comes at a time when gasoline prices have advanced 11 percent from July 2004 to July 2005, according to the Department of Statistics. Mr. Rose said it boils down to supply and demand.

?There are a host of reasons for the increases. Supply and demand, heavy usage by countries like China that making supply and demand very tight and when that occurs ? it could be any commodity ? the prices are affected all around the world,? Mr. Rose said.