Just when it looked like gas prices were primed for a steady decline, "stuff" happened. Damage to crude-oil processing equipment at a BP refinery in Whiting, Ind., on Saturday sharply curtailed gasoline production there, and the resulting shortage has caused price spikes at gas stations in surrounding states. The Whiting refinery, near Chicago, is the energy company's largest in the U.S.
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The average price for regular unleaded gas shot up 19 cents a gallon in Illinois the past week, 22 cents in Indiana, 27 cents in Michigan and 33 cents in Ohio, according to the AAA Daily Fuel Gauge Report. In the Chicago area, regular gas jumped 20 cents a gallon in one day to $3.01 as of Thursday morning. Prices rose 22 cents In Cincinnati and Cleveland on Wednesday, and 27 cents in Columbus, Ohio.
BP provided scant information as to the severity of the problem and when it would be fixed, saying in a press release only that the largest of three crude-distillation units at the refinery was shut down for "unscheduled repair work," adding that "BP is working to safely restart the unit as soon as possible. In the meantime, the company is working to meet its fuel supply obligations." Reuters news service, quoting unnamed sources, said the plant sustained heavy damage and could require a month or more to repair, which would prolong the price anxiety for motorists.
The national average for regular gas had fallen 27 days in a row until Wednesday, when it ticked upward a couple of cents. By Thursday morning it rose another 3 cents to $2.62, according to AAA. (Prices fluctuate throughout the day and could change.) Diesel fuel was unaffected by the refinery issues. The national average for diesel fell 4 cents a gallon the past week to $2.66, less than a nickel's difference from the average for regular gas. Diesel is $1.16 less now than a year ago.
As prices spiked in the Great Lakes area, they continued to decline in other parts of the country, including on the West Coast, which had experienced dramatic increases at the pump in May because of refinery problems. The average for regular gas in California fell 5 cents the past week to $3.59, down from a peak of $3.80 during May. Prices also fell in Alaska, to $3.47; Hawaii, $3.21; Washington, $3.10; and Oregon, $3.02, the other states where regular averages more than $3.
The cheapest gas was in the Southeast, where regular fell 4 cents the past week in Mississippi and Alabama, to $2.24 and $2.21, respectively. At $2.18, South Carolina had the lowest statewide average, 6 cents less than a week ago. Some industry analysts had predicted that pump prices could drop to less than $2 in several states by the end of the year because of a global glut of oil that has kept downward pressure on crude-oil prices. U.S. oil was trading below $43 a barrel Thursday morning, about $2 less than a week ago and $18 less than in late-June.
Analysts caution that refinery outages such as the one at BP's facility, and other unexpected production and supply issues, could prevent pump prices from falling to $2.
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