'Stunning' spike in gas prices creates pain at pump

2013-06-05T17:30:00Z 2013-06-06T12:52:10Z 'Stunning' spike in gas prices creates pain at pumpLu Ann Franklin Times Correspondent nwitimes.com
June 05, 2013 5:30 pm  • 

One week ago, gasoline prices throughout Northwest Indiana hovered around $3.78 per gallon. By Wednesday morning, that cost per gallon skyrocketed to between $4.26 and $4.35.

“Prices are so volatile (and) have hit the Midwest the hardest," said Nick Jarmusz, spokesman for AAA Chicago.

The increase is “quite stunning," said Gregg Laskoski, of GasBuddy.com. “What we’re seeing throughout the state of Indiana is a 19 cent jump since (Tuesday). This is contained to the Great Lakes states.”

The problem lies with outages and reduced capacity at oil refineries that supply gasoline to Midwestern states, they both said.

Maintenance at the Exxon Mobile refinery in Joliet has run longer than expected, cutting its capacity to produce gasoline, Jarmusz said.

The Joliet refinery’s scheduled maintenance shutdown was expected to last up to 30 days.

“We’re past 42 days now,” said Laskoski of the plant that can produce 238,000 barrels per day of gasoline when fully operational.

Last week, he said, the Exxon Mobile refinery had to purchase gasoline on the open market in order to fill its orders.

In April, a fire at the Marathon Refinery in southwest Detroit reduced the supply available in the Midwest, Laskoski said.

“BP in Whiting is not running at fully capacity, either,” Jarmusz said.

In fact, the massive Whiting Refinery that’s still undergoing a $3.8 billion expansion is only operating at one-third of its 405,000-barrels-per-day capacity,  Laskoski said.

“The fuel supply is at its lowest level in 20 years, he said.

Gas station owners are only reacting to the swiftly changing gasoline prices and charging customers what they pay for truckloads of fuel, plus the taxes added by government entities, Jarmusz said.

“They don’t make any money on gasoline. They make their money on the convenience stores (in the gas station),” he said.

However, the sticker shock at the pump makes for stunning contrasts and statistics, Laskoski said.

According to Laskoski, the national average for gasoline is now $3.64 per gallon. A year ago that national price was $3.59 and Indiana averaged $3.57 per gallon, compared to $4.16 per gallon as of Wednesday. That puts the Hoosier State in fourth place for the nation’s highest gasoline prices.

Laskoski said prices could go down in a week or two. Jarmusz said he expects prices to remain high until the end of June.

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