Sept. 2 (Bloomberg) -- Louisiana refineries that shut down before Hurricane Gustav may take up to 10 days to resume operations because of a lack of power, stunting fuel output at a time when regional gasoline inventories are at a 10-month low.

Marathon Oil Corp., Valero Energy Corp. and other refiners that shut plants as Gustav swept through the Gulf of Mexico began assessing the extent of damage today. Exxon Mobil Corp. shut its Baton Rouge plant, the second-largest U.S. refinery, after winds snapped power lines.

Gasoline futures prices, which have fallen 3.8 percent since the end of last week, may rebound as power failures delay recovery across Louisiana, the second-largest oil-refining state, said Andy Lipow, president of Lipow Oil Associates LLC. Valero and Royal Dutch Shell Plc are among companies that shut 17 percent of U.S. crude-processing capacity as Gustav neared Louisiana, which ships 75 percent of its fuel to other states.

``We're going to lose a fair amount of gasoline and diesel production,'' Lipow said in a telephone interview from Houston. ``Once the refiner gets all its people back into the plant, for a simple refinery it can take three to five days to get back up and running, while a complex refinery can take anywhere from 5 to 10 days to go full tilt.''

Surging Fuel Prices

Wholesale gasoline at Gulf Coast fuel terminals climbed 8 percent last week to $3.05 a gallon, the biggest weekly increase since May 9, as demand surged among evacuating residents. Wholesale markets were closed yesterday for the U.S. Labor Day holiday. The fuel traded for $3.06 a gallon at 11:03 a.m., according to data compiled by Bloomberg.

The national average gasoline pump price was $3.684 per gallon today, up 90 cents from a year earlier, according to AAA.

Gasoline held in Gulf Coast storage tanks fell 13 percent in the past five weeks to 60.85 million barrels, the lowest inventory in 10 months, according to the U.S. Energy Department in Washington. Shortages began developing in south Louisiana, where 85 percent of filling stations had exhausted fuel supplies, Governor Bobby Jindal said yesterday at a press conference in Baton Rouge.

Motiva Enterprises LLC, a Houston-based joint venture of Shell and Saudi Arabia's national oil producer, today said Gustav damaged the electrical system at a Convent, Louisiana, refinery. Power lines were still down at the 235,000-barrel-a-day plant and generators were being trucked to the site.

At least 11 refineries were shut in anticipation of Gustav or because of power loss, accounting for almost 17 percent of U.S. refining capacity, or 2.55 million barrels of crude-processing, according to data compiled by Bloomberg. Six other plants were knocked down to reduced rates.

Widespread Outages

Blackouts spread across Louisiana yesterday as Gustav neared shore and its winds snapped utility poles and toppled trees onto power lines. The hurricane made landfall about 85 miles (136 kilometers) southwest of New Orleans yesterday at 10 a.m. local time.

More than 1 million homes and businesses in Louisiana and neighboring states lost power, utility companies said. New Orleans-based Entergy Corp., the state's largest electricity provider, said it was ready to dispatch 9,000 workers to repair power lines and utility poles as soon as the weather allowed.

Houston-based Marathon won't know the extent of damage to its biggest refinery in Garyville, Louisiana, until some time today, spokeswoman Linda Casey said.

A so-called ride-out crew stationed inside the plant throughout the hurricane was scheduled to make its first inspection of the damage after sunrise today, Casey said. The plant can process 275,000 barrels of crude a day.

Hurricane Hanna

Hurricane Hanna is expected to approach Florida over the next few days, the National Hurricane Center said. Florida, which burns more gasoline than any other state in the eastern U.S., has no refineries and relies 100 percent on shipments from the Gulf Coast and overseas producers, according to the Energy Department.

San Antonio-based Valero, the largest U.S. refiner, and Chevron Corp. said it would be at least a day before they can move inspection teams into storm-affected areas to determine the status of refineries.

Chevron's Pascagoula, Mississippi, plant will continue to operate at a reduced rate until the reopening of a ship channel that was closed because of the storm, the company said today in an advisory on its Web site.

Yesterday's drop in gasoline prices ``may have been premature, as hurricanes can be unpredictable and we still have no idea whatsoever about the extent of damage, if any, to the oil production platforms or to the refineries,'' Michael Wittner, head of oil market research at Societe Generale, said in a note to clients yesterday.

Refineries Shut

Houston-based ConocoPhillips shut its St. Charles and Belle Chasse, Louisiana, plants, which can process 239,000 barrels and 247,000 barrels a day, respectively.

In addition to the Convent refinery, Motiva closed a 236,400-barrel-a-day plant in St. Charles Parish near New Orleans. The refinery sustained ``minimal damage'' and may begin the restart process within days, Motiva said in a statement. Chalmette Refining, a plant owned by Exxon Mobil Corp. and Venezuela's state-controlled oil company, also shut down.

Exxon Mobil said it doesn't know when Chalmette or the Baton Rouge plants will resume fuel output. The company plans to begin damage assessments of its offshore and onshore assets in the Gulf region today, according to an advisory on Exxon Mobil's Web site.

Total SA, Europe's third-largest oil company, had shut its 232,000-barrel-a-day refinery in Port Arthur, Texas, and expects the plant to start again ``quickly,'' Kevin Church, a Paris-based Total spokesman, said by phone today.

Idled Output

El Dorado, Arkansas-based Murphy Oil Corp.'s Meraux refinery near New Orleans was idled, halting 120,000 barrels of daily crude-processing capacity, as was Alon USA Energy Inc.'s 80,000- barrels-a-day plant in Krotz Springs, Louisiana.

``Obviously, we're not going to have as much gasoline next week as we have this week,'' Peter Beutel, president of New Canaan, Connecticut-based Cameron Hanover Inc., said in a telephone interview.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net

Last Updated: September 2, 2008 16:38 EDT