“There was an outage (Feb. 1) at a refinery in Indiana and of course that’s impacted gas prices in the Midwest,” pushing the national average higher as well, according to AAA Club Alliance spokeswoman Kara Hitchens, referring to the BP Whiting refinery, a facility that processes 435,000 barrels of crude per day. “I believe it’s going to be a three-week shutdown. (Following the) power outage I think they’re just taking the opportunity to do some inspections and maybe a little bit of maintenance, as well.”
Last Thursday, Ohio ranked atop the top 10 states to have seen the largest increases in their averages, going up 30 cents from a week before, according to AAA.).
Pump prices usually move higher as winter turns to spring due to more costly summer fuel being delivered to gas stations, but double-digit gains in the course of just a week is “notable,” according to AAA.
“Instead of having to have the price of gas go up toward the springtime as summer fuel, which is more expensive, comes online, we’re just going to have to deal with a little bit earlier than usual,” Hitchens said.
Credit: Nick Graham
Credit: Nick Graham
There’s “plenty more pain” to come at the pump in the near future, according to Patrick De Haan, head of petroleum analysis at GasBuddy, which tracks fuel prices.
“This is the time of year that we generally — from Valentine’s Day all the way through April or May — we see gas prices progressively going up,” he said.
That, he said, won’t occur every day, as price cycling will continue. Price cycles are where stations raise prices 25 to 40 cents a gallon after ignoring minor fluctuations in the market and undercutting each other by a penny or two each day until they run out of margin.
But in the next couple of weeks, instead of happening “every two to three, maybe four weeks during the winter,” the price cycles will become more frequent, he said.
“Typically in the spring, we get one (price cycle) every one to two weeks, usually every seven to 12 days or so in the spring,” De Haan said. “Last week, we saw prices going up to $3.29. We could see a price hike in another week or two to $3.39, then two weeks after that $3.49, progressively really until April or May.”
The Indiana refinery outage isn’t the sole culprit of rising gas prices, De Haan said.
“We saw cold weather shutting down some refineries in Texas and Louisiana in mid-January and then Whiting happened on Feb. 1, and now California has already begun the transition over to summer gasoline and the price of oil is hovering near a multi-month high, just under $80 a barrel,” he said. “Last time we hit $80 was in November, so there’s not only the seasonal factors that are jumpstarting the increases, but we have some extenuating circumstances and outages that are going to segue into the time of year we normally see prices going up because of seasonal changes.”
The price of gas likely will plateau between April and Memorial Day.
“Typically we peak before then some point in April or early May,” he said. “Very rarely do we see prices peak beyond Memorial Day. That’s my expectation is once refinery maintenance is done, typically that happens in April, that typically represents the high water mark.
“Once we start to see refineries returning from maintenance, usually there’s enough breathing room that that once maintenance is done we start to see gasoline production increase and that’s eventually what will push prices back down.”
Compared with the average price for a gallon of unleaded gas a year ago Monday, prices have fallen 13 cents nationwide, but increased 5 cents in Ohio, 1 cent in Dayton, 10 cents in Springfield and 5 cents in Cincinnati.
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