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Bah humbug: Gas prices spike to highest in nation for holiday travel

Marie Havenga • Dec 22, 2016 at 8:00 AM

As you head over the river and through the woods to grandmother's house, or travel out of state to gather with loved ones this holiday season, your wallet will be lighter and perhaps your budget a little tighter.

That’s because the Great Lakes region currently has the highest wholesale gasoline prices in the nation.

“That's a rare feat,” said Chicago-based petroleum analyst Patrick DeHaan of GasBuddy.com. “Usually it's California or the northeast that has the highest wholesale prices. We can pin it on the refinery issues we've seen.

“And, unfortunately, it's happening at a time of year when nobody likes to spend more money because we've all spent a lot on Christmas gifts,” he added.

The average gas price in Michigan has jumped 19 cents since last month. As of Wednesday afternoon, the price at the pump stood at $2.45 in Spring Lake.

DeHaan said he will be road-tripping to Grand Rapids on Friday to spend Christmas with his family. He plans to fill up in northwest Indiana, where prices tend to be lower this time of year.

Is DeHaan giving his family gas cards as Christmas gifts?

“No, but that would be pretty funny,” he said.

Why the price hike now?

Nationally, we're seeing the largest December gas price rise in six years, due to OPEC cutting production.

The national average for a gallon of gas is $2.25, and rising. A year ago, the national average stood at $1.99, which means a tank of gas costs $5 to $10 more than it did last Christmas.

DeHaan said recent frigid weather caused a temporary shutdown at a Joliet, Illinois, refinery. A Gary, Indiana-area refinery and one near Detroit are also experiencing minor issues, which leads to higher prices in our region.

“Refinery issues usually last a week or two,” DeHaan said.

Wait until next year

The fuel forecast through New Year's Day isn't rosy red and full of cheer, but after that, we may receive a late holiday gift of lower prices at the pump. DeHaan predicts prices will start to slump by mid-January.

“I think we will see some relief between mid-January and mid-February,” he said.

The reason may surprise you. That's when temperatures tend to be cold and snow drifts high, which leads many of us to hunker down at home for a long winter's nap instead of venturing out on the highways.

“The colder it is, the more incentive we have to stay inside,” DeHaan explained. “That leads to inventories swelling and the refineries offering some big discounts.”

Last year, during the same time period, gas prices dipped into the $1.20-per-gallon range.

But nothing lasts forever, right? Not winter, and not low gas prices. By spring, we could see gas going for closer to $3 a gallon.

“We'll probably get the closest to $3 than we have since 2014,” DeHaan forecasts. “If there are refinery issues, it could send gas over $3 a gallon. Let's cross our fingers.”

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