Michigan Gas Prices Surge 29 Cents Following Refinery Outage

Gasoline prices in Michigan have surged by 29 cents per gallon, reaching an average of $3.08 following a recent refinery outage. This increase comes after prices had briefly dipped below $3 per gallon statewide for regular unleaded gasoline last week.

Adrienne Woodland, spokesperson for the auto club, noted on Monday, October 27, 2023, that motorists across Michigan are now experiencing significantly higher prices at the pump. The average price of gasoline has rebounded above $3 per gallon, with some areas seeing even steeper increases.

In the days leading up to this price jump, many metro Detroit residents reported not being able to find gasoline priced below $3 per gallon. According to the American Automobile Association (AAA), the average price on October 26 was actually two cents higher than the previous month but still five cents lower than the same time last year.

The sudden price increase is attributed to a temporary outage at a major refinery in the Midwest. The BP plant in Whiting, Indiana, which is the largest refinery in the U.S. Midwest, experienced a fire that led to a shutdown of its units. Operations resumed by Friday after power was restored, as reported by Reuters. The refinery had also been undergoing planned maintenance since mid-September, which included work on critical units such as the crude processing unit and fluid catalytic cracker.

Throughout Michigan, gasoline prices varied significantly based on location. The most expensive averages were reported in Lansing at $3.15 per gallon, followed by Ann Arbor and Saginaw, both at $3.13. Conversely, Traverse City reported the lowest prices, with gasoline at $2.86 per gallon, while Marquette and metro Detroit had averages of $2.94 and $3, respectively.

Nationwide, gasoline demand has remained stable at 8.45 million barrels a day, according to the Energy Information Administration. However, the total gasoline supply has decreased from 218.8 million barrels to 216.7 million barrels. As of now, the national average price at the pump stands at $3.05 per gallon, as reported by AAA.

The fluctuation in gasoline prices can also be attributed to movements in crude oil prices. West Texas Intermediate, a benchmark for crude oil, was trading at over $61 per barrel earlier this week, reflecting a slight increase from previous days. During a recent appearance on NBC’s “Meet the Press,” Treasury Secretary Scott Bessent mentioned that while gasoline prices have decreased, this does not correlate with rising grocery prices.

Despite a rise in the inflation rate to 3% last month, this figure was still lower than economists had projected. Analysts anticipate that the Federal Reserve may consider cutting interest rates in its upcoming meeting later this week.

For further inquiries, contact Frank Witsil at 313-222-5022 or email at [email protected].