Michigan Gas Prices Soar 29 Cents After Refinery Outage

Gasoline prices in Michigan surged by 29 cents per gallon, reaching an average of $3.08 on October 26, 2023. This increase follows a brief period during which prices dipped below $3 for regular unleaded fuel, marking a notable shift for motorists across the state.

According to a statement from Adrienne Woodland, a spokeswoman for the auto club, the sudden rise in gas prices is linked to a refinery outage. The temporary shutdown at the BP refinery in Whiting, Indiana, which is the largest in the U.S. Midwest, led to increased prices at the pump. Although operations at the facility resumed by Friday, following a fire and subsequent power restoration, the impact on local fuel prices was immediate.

Prices varied across Michigan, with the highest averages recorded in Lansing at $3.15 per gallon, and Ann Arbor and Saginaw both at $3.13. Conversely, the lowest prices were found in Traverse City at $2.86, and Marquette at $2.94, with metro Detroit seeing prices at $3.

The fluctuation in prices can be attributed to both supply and demand dynamics. The Energy Information Administration reported that gasoline demand remained stable at 8.45 million barrels per day. However, gasoline supply experienced a decrease from 218.8 million barrels to 216.7 million barrels during the same period.

Despite the recent increase, the average price on October 26 was still 5 cents lower than the same time last year, illustrating the volatility of fuel prices influenced by various factors, including crude oil prices. On the same day, West Texas Intermediate crude oil was trading at over $61 per barrel, reflecting a rise from previous days.

In a broader economic context, Scott Bessent, the U.S. Treasury Secretary, discussed the current state of gasoline prices during an appearance on NBC’s “Meet the Press.” He noted that while gasoline prices have decreased, consumers are still facing higher costs in other areas, such as groceries. The inflation rate increased by 3% last month, which was lower than economists had anticipated.

With the Federal Reserve meeting later this week, analysts are speculating that the central bank may consider cutting interest rates in response to the current economic landscape. As gas prices continue to fluctuate, residents in Michigan are left navigating the immediate impact on their budgets, with hopes for more stability in the weeks ahead.