Analysts: Midwest drivers to see lower gas prices

The worst may be over for drivers in the upper Midwest who have been grappling with the highest gasoline prices in the continental U.S.
AP Wire
Jun 12, 2013

Analysts said one major Illinois refinery is back online and another big one in Indiana is on track to ramp up production again soon. The refineries' ongoing maintenance — which led to reduced supply and higher prices — are the primary culprits for the surge at the pump.

"On balance, I think the worst is over," Tom Kloza, chief oil analyst at GasBuddy.com, said Tuesday.

Exxon Mobil's refinery in Joliet, Ill., was offline longer than expected, he said. Assuming there are no hiccups with BP's plans to soon restart a crude unit at its refinery in Whiting, Ind., prices could drop below $4 a gallon within weeks throughout a five-state region stretching from Wisconsin to Ohio, according to experts.

"You just have one refinery issue after another. As they're coming back on, that should be a big thing," said Phil Flynn, chief energy analyst at Price Futures Group in Chicago.

AAA said Michigan's average price of a gallon of unleaded regular gas was $4.20 on Tuesday, topped only by Hawaii and well above the national average of $3.63 per gallon. Motorists in Illinois, Indiana and Wisconsin were paying above $4 on average while drivers in Ohio were shelling out $3.90.

Gas prices in the five Midwest states ranked in the top nine states nationally.

With many people preparing to hit the road for their summer vacations, public anger over the high price of gas is building in Michigan. One Republican lawmaker is drafting a bill designed to entice construction of a new refinery in the state and Democrats are questioning the state attorney general's commitment to investigating high prices.

Anton Fellinger, who lives near Detroit in Macomb County's Washington Township, finds the high pump prices particularly acute with his 2008 Chevrolet Silverado.

"My blood boils every time I put gas in it," he said. "I'm biting the bullet right now, but if this continues I might pull the trigger and get something that gets me 30 miles per gallon."

Fellinger, who drives about 18 miles to work, found a more economical mode of transport on Tuesday: his motorcycle. But that option is limited in northern states such as Michigan. His saving grace on days he drives the Silverado is a local gas station that offers free car washes for customers who buy at least eight gallons of gas.

"I've just been racking up the free car washes," he said. "I might as well get something out of it."

Analysts said it will take some time for the refineries to ramp up production, but the upgrades — which took longer than expected at the Illinois refinery — ultimately could pay dividends because some maintenance is being done so facilities like the one in Whiting can refine Canadian crude oil.

"This is the busiest (refinery) reconfiguring quarter we've seen in a generation," Kloza said. "A year from now you should be beneficiaries of all the cheap crude coming from Canada. It's a little pain this year but perhaps it means gain next year."

Continuing of a time-honored tradition of politicians from either major party seizing on gas prices whenever they spike, Democrats in the Michigan House on Tuesday said the public deserves answers.

House Minority Leader Tim Greimel of Auburn Hills said he does not believe most gas station owners are taking advantage of the refinery issue to gouge drivers. But in calling on the Michigan's attorney general to investigate, he questioned if there is broader price manipulation higher up in the supply chain.

"It's time the state government stood up and tried to protect Michigan families in every way possible," Greimel said.

Attorney General Bill Schuette, a Republican, said a myriad of factors contribute to fluctuating gas prices. He warned retailers against taking advantage of customers while at the same time saying his office routinely investigates the issue and will not hesitate to act if laws are broken.

Mary Jo Godard, a home health care worker, said fuel costs are taking a "big chunk" out of her paycheck. Godard said she was spending between $250 and $300 a month on gas, and figures that has increased in recent weeks. She said high gas costs and long work hours conspire to keep her from doing much in her off hours.

"I don't have time — and I really can't afford it," said Godard, who lives in Sterling Heights in suburban Detroit. "Thank God I don't have a house payment. How do people do it?"

Comments

davewali

Maintenance SHOULD be a cost of doing business, NOT a reason to rise prices.
Upgrades SHOULD be a cost of doing business, NOT a reason to raise prices.
BOTH of these issues SHOULD be planned for, with ZERO disruption to supply OR prices.
Expecting a REPUBLICAN Attorney General to question or investigate is akin to asking the fox to guard the hen house.
"Attorney General Bill Schuette, a Republican, said a myriad of factors contribute to fluctuating gas prices." Does maintenance at any other business cause a DRAMATIC increase in prices? Does Meijer raise prices 20-30% when they reconfigure their shelves?
We have been being ripped off by the oil companies for the last few weeks, for reasons that the AG will call NORMAL, so he can keep the donations coming to his party from the oil companies.

Say no to new taxes

This is what happens when you let endless mergers occur till you only have a few players in the marketplace. The same thing is going on with internet provider's and cell phone service. Less competition = higher prices.

Wingmaster

Don't forget no new refineries built in over 30 years! (New ones finally being started in N. Dakota) Before the yammering (Lanny'ering) starts on that statement, I don't care if existing refineries have improved their production, it still does not help supply when a weather event, fire or some other event shuts down one. When that happens it immediately screws up supply dramatically depending on the area. Bada boom, bada bing up go prices! http://freedombytheway.com/2011/...

New drilling, now there's another issue........

rukidding

So we now have a term for it, lanny'ering, I like it.

Lanivan

Wing - there is now a new refinery being built in Yuma, Arizona, as well.

rukidding

No offense Lanivan, I enjoy your comments and point of view as much as anybody else expressing their views in "this paper".

It has become a game for me to guess who the commenter’s will be, prior to viewing them, by the title of the article. Then the second phase is hypothesizing what the posts will say, in general, and finally grade myself on the results. I don’t always do so well but not bad overall. What I am able to do fairly consistently, is figure out what the article will be about, given the authors and this papers one sided view point. It’s like having a conversation with my wife, she can start a few words of a sentence and I can finish it 100% of the time, but I don’t as that would be suicide; we’ve been together a very long time.

Long comment short, yes I know, I enjoy the banter tremendously and look forward to it daily; keep up the good work. Oh this isn’t just for Lan, it directed at all thoughtful posters; yes Wing, even you. 

Lanivan

Ditto on your comment, rukidding. I take no offense, but instead am pleased if my predictable comments have enabled you to raise your GPA in your Trib Comments Game!

Actually, knowing my interest in politics, it was at my husband's urging that I initially began commenting on this forum (I suspect he might occasionally question the wisdom of that urging). It is fun, informative, and I enjoy the thoughtful comments as well. Emphasis on 'thoughtful'.

Wingmaster

Lol ru, great post.....but what do ya mean even me!! I'm going to take that as a compliment to my direct, sometimes brutal approach to topics! Like you, I have learned how to keep the peace with the better half in spite of my endearing style;-)

GH55

It always amazes me, complaining will never fix the problem! Reduce your use!
Get out of the 2008 Siverado! How many people drive around in vehicles they do not need? How many people depend on gasoline to "fuel" their hobbies? Boating, 4 wheeling, Harleys, weed whippers, lawn mowers, snowblowers, behemoth "glampers" (as the State calls "glamour camping" in luxury RVs) and leaf blowers.
The best revenge on these oil companies is to reduce your use! Get out there and ride a bike, get rid of the "lawn Ferrari", shovel your driveway, get a tent, buy a rake!
You may even lose something else besides the shock at the gas pump! Everytime you fuel up, the oil companies are robbing you! Record profits! Don't play their game! Its easy!

Lanivan

Good post! Actually, gasoline demand in the US has gone down about 9% since 2005, but we are paying 65% more for it. While the demand is down in the states, it's through the roof in India and China.

This recent gouging is a Midwest thing, due to Midwest refinery "issues". My friends around the country tell me they are paying around $3.47/gal.

Wingmaster

That's right dang it. You need to lower your standard of living. Who do you people think you are...Americans!

Geez you all need to buy little economy cars or better yet bicycles you fat azzes. Don't give me guff about having to push a lawn more across your 3 acre yard either, you don't deserve to live in that big o house anyway.

Oh yeah, you don't deserve to have a big boat either if I can't enjoy it neither should you.

Profits, that's another dirty one. How dare you make money, more money then me. Just because you take more risk then me you think you deserve more compensation. Quit taking risk you dummy, your making it bad for the rest of us granola munchers out here trying to pedal our foreign bikes on none existing bike paths.

America, 2013

rukidding

This is way too much fun, one usually has to pay for this much enjoyment.

LessThanAmused

It's sad that you're not as concerned about your quality of life as you are about your so-called standard of living. You've got to be a pretty pathetic individual to measure your success in life by the number and size of the possessions you've accumulated. There's more to life than being a consumer.

ghresident

GH55, "Get out of the 2008 Siverado!" I did, stupid 5.3 had more issues than any other truck I owned. Just got a new Nissan Titan, not much better on gas, but it sure is built better than the Government Motors Corporation "GMC" I used to have....lol!

Say no to new taxes

Do you know what our number one EXPORT in this country is today? GASOLINE!

Lanivan

The world is flat. The US is producing more oil than it imports, the first time in over a decade. It is exporting it to the rest of the world, where consumption is up. Demand is down in the US, but sadly, we can't compete with the supply and demand scenario/record profits that the rest of the world provides.

Drill, Baby, Drill isn't workin' out so well for us. http://thinkprogress.org/climate...

Wingmaster

The number of new offshore leases has plummeted under Obama — falling by more than half, according to the Bureau of Safety and Environmental Enforcement.

During Obama’s first term, the U.S. has so far issued 1,304 new offshore leases compared with 3,317 in Bush’s second term — a decrease of 61 percent.

The number of new permits for offshore wells also nosedived. The U.S. approved 1,316 new permits during Bush’s second term. The number has fallen to 515 — so far — under Obama, also a 61 percent drop.

So by your examples, I should go ahead and buy that 3/4 ton pick-up because with higher consumption our prices will come down because they'll start selling to the US instead of exporting. Perfect. I'll keep driving a lot and you keep cutting back on your comfort, buy that little smart car thingy, vacation travel less.....forcing fuel prices higher AND reducing your lifestyle.

I don't follow or subscribe to your line of thinking on this. If we have an excess of fuel drilling and producing, it does lead to an over supply and lower prices. Supply side economics works and creates the activity in the economy we need and the taxes you lefties want to redistribute to the lazies among us.

What we have now is everybody is miserable because slackers are not getting enough hand outs, bloated fed and local gubments do not have enough revenue and hard working Americans are pinched because gubment will not rein in spending and keep raising their need for revenue (ie taxation). Cost of everything goes up because yes, companies need to keep profits coming in to survive and grow.

A robust economy is what is needed and we will not get it with this Keynesian economic model BO is pursuing. Stagflation ring a bell? This crap fails every time it is tried throughout history and it is about to rob generations of a better life then their parents.

Big gubment and their cronies can kiss me where the good Lord split me!

Wingmaster

Why is that?

Post a Comment

Log in to your account to post comments here and on other stories, galleries and polls. Share your thoughts and reply to comments posted by others. Don't have an account on GrandHavenTribune.com? Create a new account today to get started.