BP Refinery Outage Leads to Higher Midwest Gasoline Prices

Unplanned outage at the Whiting, Indiana, refinery is affecting gas prices across the Midwest region.

August 19, 2015

WASHINGTON – The U.S. Energy Information Administration (EIA) reported yesterday that the unplanned outage on Saturday, August 8, at BP’s Whiting Refinery in Indiana has sent gasoline prices soaring in the Midwest.

In Chicago, the wholesale spot price for gasoline increased 60 cent per gallon (gal) to $2.47/gal on August 11. EIA reports that the increase in spot prices has led to higher retail gasoline prices throughout the region, noting that on August 17, regular retail gasoline prices in the Midwest increased 32 cents/gal from the previous week to $2.79/gal, the largest weekly increase for Midwest gasoline prices since the aftermath of Hurricane Katrina in 2005. Average retail prices for regular gasoline in Chicago and in Cleveland, Ohio, increased 68 cents/gal and 43 cents/gal, respectively, from the previous week to $3.37/gal and $2.83/gal, respectively.

BP shut down the Whiting refinery on August 8 for unscheduled repair work. While the rest of the refinery continues to operate safely, the outage has reduced production and the company says it’s working to meet its fuel supply obligations. With a production capacity of 413,000 barrels per day, the refinery is the sixth-largest refinery in the United States.

Nationwide, AAA reported yesterday that the national average price for regular unleaded gasoline ended a 27-day streak of daily declines last week and has since increased for six straight days. Tuesday’s average price of $2.67 per gallon is an increase of eight cents per gallon versus one week ago, due largely to the refinery outage. While the Great Lakes region has experienced the largest gas price increases, notes AAA, neighboring states and in the Central United States have also seen gas prices rise over the past week in response to the refinery outage.

For more on how refinery disruptions can affect fuel pricing and supply visit the NACS Retail Fuels Report.

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