Midwest Sees Gasoline Price Hikes

Low inventory, high oil prices and refinery shutdowns contributed to record-breaking pump prices in the heartland.

May 29, 2013

ST. PAUL – Lately, motorists in the Midwest have felt more pain at the pump as gasoline prices have soared, triggered by a combination of refinery outages, high oil costs and low inventory, the Washington Post reports. For example, in Minnesota, pump prices rose 80 cents in under a month, reaching a record $4.27 per gallon. North Dakota stations posted prices at $4.24 per gallon, a 64-cent increase in less than 30 days — and also a record. 

The U.S. Energy Information Administration (EIA) pointed to “both planned and unplanned refinery maintenance” in Midwest refineries as part of the reason for the push upwards. The smaller gasoline output “significantly depleted” inventories. The agency predicted another three weeks of shortened supply before extra fuel could arrive from the Gulf Coast pipeline.

“I’m not a conspiracy theorist, but it is really interesting, the timing of all this,” said John Thompson, a spokesman for AAA’s Mid-Atlantic region. Thompson said the timing of large price hikes just ahead of Memorial Day weekend was terrible. “We hope that what we’re seeing is short-lived.”

EIA analysts Doug MacIntyre attributed the Midwest price increase to “a combination of factors, but the main thing is we got refinery outages. Some of that for maintenance and some unplanned outages. And we’ve got inventories that have been drawn down to some degree because of earlier refinery issues.”

A combination of factors cause gas prices go up each spring, Since the year 2000 and the final implementation of the Clean Air Act amendments prices most often peak around Memorial Day as a variety of deadlines occur. Some of the problems in the Midwest were related to handoffs related to these deadlines. NACS developed a fact sheet, “Why Gas Prices Historically Go Up in the Spring,” that addresses some of these issues.

Advertisement
Advertisement
Advertisement