Petrol prices surge in US amid fears of gas and diesel shortages in wake of fatal Alabama pipeline explosion

It is the second major spill in Alabama for Colonial Pipeline in as many months

Emergency teams arriving at scene of pipeline explosion (Reuters)

The fiery rupture of one of America’s most important refined petroleum pipelines in Alabama, which killed one person and sent several others to hospital, is causing prices to soar amid concerns it could create shortages at petrol stations across the eastern United States.

The accident occurred when crews were working with heavy machinery at a section near Birmingham, Alabama, operated by Colonial Pipeline. It could be a week or even a month until repairs are completed and the company receives authorisation to resume normal flows.

A second line that runs parallel to the damaged one and which carries so-called distillates - diesel and jet fuel - is also likely to be shut down for several days even though it so far appears that it was left intact after the mishap. Together the two pipelines carry more than 2 million barrels of fuel a day.

The damage occurred late on Monday, which was immediately followed by an explosion that sent a plume of flames and dark smoke high into the sky. It is the second spill for Colonial, which suffered a similar rupture several miles to the south of Monday’s incident in early September.

A nine-man crew was on the site when Monday’s explosion occurred, the Governor of Alabama, Robert Bentley, confirmed. There was no information on the conditions of the survivors of the blasts, but officials said that by Tuesday morning the fire had been brought under control.

The September breakage, which saw the spilling of 252,000 to 336,000 gallons of gasoline, caused shortages across parts of the southeastern United States, with some petrol stations scrambling for supplies in several states including Georgia, Tennessee and Alabama.

However, analysts believe Monday’s rupture could prove more serious. “In a worst-case scenario we could be talking about more severe outages than what we saw back in September. It's very worrisome that both pipelines are shut down right now,” Patrick DeHaan, an analyst with price-tracking service GasBuddy.com told the Associated Press.

The pipeline in question is part of a 5,500-mile system that carries refined products all the way from Houston to New York Harbour and supplies petrol to no fewer than 13 states up and down the eastern seaboard.

“Both lines are down, no gasoline is moving down the line. Nothing is going through,” said Tamra Johnson, a spokeswoman for the American Automobile Association. “So we can actually start seeing some supply outages in the coming days if they don't put a plan in place.”

Gasoline futures for December delivery in US markets rose as much as 13 percent early in the session to $1.6351, its highest since early June.

The severity of the supply situation will ultimately depend on how long it takes before full operations can be resumed.

Analysts at Barclays told Reuters that the gasoline line could be shut for at least a month because regulators “will be very cautious about restarting the pipelines, especially since Line 1 just suffered a spill (in September) and tensions between pipeline companies and environmentalist groups have never been higher.”