Refinery woes shoot gas prices up Gasoline prices are exploding in some regions, zooming as much as 20 cents in a day in the Midwest as a key Kansas refinery remains flooded and as gasoline stations recover big increases in wholesale costs they've been swallowing for at least a week due to problems at other refineries.
Increases are beginning to spill into other areas, mainly along the Atlantic and Gulf coasts, as supplies of gasoline tighten due to problems not only in Kansas, but also at refineries in Indiana, Oklahoma, Texas and California, according to data from the Oil Price Information Service, which tracks prices daily, and from the government. Retail prices jumped as much as 15 cents a gallon in a single day at some of Mike Ackerman's Circle A Food Mart stations in southern Indiana, "one of the larger ones" among single-day jumps, Ackerman says. The biggest he could recall was 40 cents in one day after a price war about 12 years ago. "One of the best allocators out there is price. Areas that need supply tend to (pay) a higher price. It's pure supply and demand," he says. Indiana and Nebraska are where average prices jumped most over the weekend, according to OPIS data. South Dakota, Minnesota and Michigan were close behind. Because refinery problems cut supplies, wholesale prices shot up the past week and "some retailers were losing 6 cents a gallon. What happens is, somebody can't take it anymore and you get a big jump. To the consumer it looks like a significant increase, but it's where it should have been the past few days," says Scot Imus, executive director of the Indiana Petroleum Marketers and Convenience Store Association. The Midwest increases alone will be enough to pull the nationwide average back above $3 later this week, says Tom Kloza, veteran analyst at OPIS. "In the Corn Belt or the Rust Belt, the wholesale price of gasoline has gone up 30 to 50 cents (a gallon) in the last 10 days or less," to about $2.80 a gallon, he says. Add 60 cents to determine the pump price, according to Kloza and other private and government forecasters. The government's weekly price report Monday captured the big Midwest increases and the beginnings of the others. The Energy Information Administration reported that regular-grade gasoline rose 2.2 cents a gallon the past week, to a nationwide average $2.981. That was powered almost solely by explosive jumps in the Midwest, where the average rose 9.1 cents a gallon, to $3.045. Averages rose a fraction of a cent in the Gulf Coast and along the Central Atlantic states. Prices fell elsewhere. The increase in the U.S. average follows a six-week respite in which it dropped 25.9 cents to $2.959 after peaking at a record $3.218 on May 21, according to EIA. That was a numerical record, but short of EIA's inflation-adjusted record of $3.292 for May. The inflation-adjusted target, now $3.30, changes monthly. |
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