This happened

As you may already know, prices spiked up over the weekend. It’s $3.899 in Ohio, $3.999 in Indiana, and $4.159 In Michigan. I’ll get to the reason for that disparity later, but first, to the reason why we spiked up in the first place.

We have seen an enormous rise in spot prices recently, up almost 35 cents in the last week, and 80 cents since mid-April. The big reason for this is refinery issues that have plagued the mid-west, as well as some pipeline issues. Part of BP’s Whiting refinery is due for reopening this month, as is Exxon’s Joliet refinery. This actually helped lower June’s first cycle prices at the beginning of the week, but a round of refiner buying is driving the latest price increase. The EIA supply reports are showing we are low on supply. Rack prices out of Chicago are also rising (I don’t have rack prices closer to Indiana, Michigan, and Ohio, unfortunately.)

That being said, we have not seen a corresponding rise in prices at the pump. At least, we aren’t as high as we should be with the current spot price. Indiana has an average of $3.98, and it still is 27 cents lower than the Spike Line. Michigan’s average is $4.15, yet they are 15 cents lower than the Spike Line. Ohio is up to $3.85, yet they are almost 16 cents below the Spike Line. Prices have been lower than the Spike Line for quite a while now. The only reason I have is that some areas are being supplied from outside the region.

That leads me to the reason for the price disparity we are seeing. Ohio is always lower, as they have a lower tax on gasoline. Indiana and Ohio may also be lower than Michigan because they are being supplied in part from the Gulf Coast. They have a spot price almost 70 cents lower than in Chicago. I believe Michigan is not getting supplied by the Gulf coast due to it’s proximity, that is reason enough for the higher price.

So, how long will this last? It is hard to say. With almost 500,000 barrels per day of refinery output allegedly coming back online, relief should be on the way. But that output will take around two weeks to come online. We shall see in the coming week how things work out, and I will keep you posted on what I find.

Updated: June 2, 2013 — 10:53 pm


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  1. Mike - Kalamazoo

    Yep, and as soon as this cause becomes outdated they will invent another problem to keep it in the 3.999 to 4.199 range for the summer. This is what happens when the powerful control everything and short of a revolution there is nothing we can do about it as “all” of our politicians are bought and paid for by the oil companies.

  2. It’s all about the almighty dollar. We are exporting crude while enduring ‘shortages’ at home.

  3. independent retailer

    My cost 4.11 today!!!

  4. Thank you for the update Bill. We shall see if the prices go down when the refineries come back online in the next few weeks.
    Whats interesting? The PANIC people had when they noticed prices going above four bucks. So it was 3.99 and went to 4.25. Thats 1.60 more for ten gallons? Then they go in and buy bottled water and a candy bar??? Or lotto (like me). Put it in perspective…I don’t like it but its NOT the end of the world people. It will come back down. If the predictions of a few years ago were true we’d be paying 6 bucks a gallon or more but we are not.

  5. Not suggesting collusion, but ever wonder about Bloomberg dropping Chicago Spot listing just a couple weeks prior to “All Hell” breaking loose in the Mid West?

  6. TimmP…Bloomberg still has the data. You just have to pay for it. Or go to this site…

    and start hunting for the correct last two digits for the story on the day’s closing spot markets in Chicago. They always end in 40-6f (hexadecimal), or 70, 71, 72. Spot prices were up 16 cents more today.

  7. What is rediculous is we have to pay to fix there problems. If we have problems with our equipment
    we have to pay for it ourselves. Seems stupid to me.

  8. Soooooooooooooo – since we had 26 refineries in 1982, why don’t they open some of those closed ones and not only make it so gas prices are lower but also deal with some of the high unemployment. Seems like a pretty simple fix – if they were so inclined!! LOL!!

  9. Will Chicago Spot break $4 tomorrow? Good lord you’d think the world was coming to an end with these “refinery issues.”

  10. Speedway hitting $4.29 in Holland, MI now.

  11. Michigan, Indiana, and Wisconsin are now leading the US in expensive Gasoline, more so than after Katrina and Rita. AND this is showing up PRIOR to the MI spike taking full affect.

  12. Where are the attorneys general in these states? These states have at or below median incomes compared to the rest of the country, but we pay for all oil/gas/pipeline/weather/gasoline/squirrel errors in all other parts of the country. When Katrina hit, we paid longer and harder than other states, the same for Rita. When storms hit our supplies, we pay and other locales don’t. It makes no sense. We pay at the pump no matter who has the issues.

  13. $4.259 in Fort Wayne now.

  14. 4.299 Kalamazoo area

  15. Many $4.299 in South Bend for a day or 2 now. Some more up today. Some ‘cheap’ stations upper 3.90s.

  16. $4.299 in Wayland, MI.

  17. One month ago I paid $3.69 for regular unleaded with barrel prices around $96. Today it is $4.29 with barrel prices around $94.

    I understand “refinery issues” but this still doesn’t make sense.

  18. Perhaps next week’s spike will take Indiana to $4.75. We can’t go more than 7 days without one anymore. Bull**it!!!

  19. It won’t do any good, but please go to the attached site and sign this petition

  20. Well the prices have spiked to $4.35 in NW Indiana. Can $5 be far off ??
    I get sick and tired of the Obama-bots telling me that gas was $4.21 with Bush !
    Well its over $4.21 now, and not showing any signs of letting up !

    I wonder how high it will go before someone takes notice ! Yea, its only a couple more $$ at the pump, but it takes away from other stuff I could be spending my $$ on !

  21. We sat on our collective rear ends in 2008 and nothing happened. The global economic reality provided a respite. Today the powers that be learned from 2008 and realized the money is in hosing large swaths of the US for shorter periods of time with rolling refinery outages not unlike what happened in Clifornia in the 90’s and Enron.

  22. $3.999 sw Ohio.

    I did, however, see one BP that jumped all the way to $4.219.

  23. I just heard Patrick DeHaan’s interview on the local radio station. Let’s just say that believing some of the stuff reported takes leaps of faith that would top a triple jump Olympic record… Similar stuff is reported on ‘the media’, blogs, etc.

    My guess is we’ll go well above 4.00 for 2-3 weeks, then get a break, then some global issue will pop crude to just under 100$ and we’re back to square one at 4.00.

    Only if corporations that are getting hosed because their customers are getting hosed we will see some meaningful results. When discount big box stores and fast food restaurants and the like begin to feel the heat, maybe they’ll send some of their lobbyists (the ones busy keeping unions out) to actually make a case for a closer look at the energy markets. Wouldn’t that be fun or what…

  24. I just saw a report on CNN that the first tropical storm of the season has formed in the Gulf of Mexico. Any bets on Tropical Storm Andrea shooting gas up to $5.25 by next Wednesday? After seeing this current pricing BS, I guess anything’s possible

  25. Just the thought of a tropical storm or hurricane should be worth 20-30 cents more a gallon !

    Bring on the $5 and lets watch the economy slowly slip back into the crapper !

    Party on Wayne !

  26. There should be an investigation into what goes on at the Chicago Board of Trade. Someone’s getting rich, and it ain’t us.

  27. Mike - Kalamazoo

    They are just conditioning everyone to think that 3.999 a gallon gas will be a bargain. They we’ll keep it around 4.09 – 4.29 for a couple of weeks then drop to 3.95 – 3.99 and everyone will be better and be happy. They should be put on trial for treason.

  28. LOL!

    I bet you all wish you owned a flex-fuel car like me, don’t you?

    $2.99 for E85 today gentlemen.

    With a Flex-Fuel car, you have a CHOICE in what fuel to use.

  29. Jim-
    Too bad the energy output of E85 is a lot less than that of regular gas. So while you’re paying less, you are also using more. It’s pretty much a wash, if not costing you more.

  30. Not at these price differences, David. $4.29 for regular versus $2.99 to $3.19 for E85 is not only enough to make up for the lower mileage, but then some.

  31. Honorable Attorney General, Filed on 6/6/13
    I want to bring your URGENT attention to the unjustifiable price increases in gas prices. There seems to be no check on the oil companies and our state has been the one hardest hit with price spikes in the gas prices. At the time of filing this complaint, the price for regular grade gas stands at $4.299 in Greater Grand Rapids and surrounding areas. There is no such spike in the current world market that justifies this increase from $3.759! The only news (not confirmed) says that unknown refinery problem. The prices for gasoline is often spiked by almost $0.30-$0.45 within a week and then dropped cent-wise to be spiked again. The prices are not than volatile as they are reflected on the gas pump! These is a scandalous attitude of many oil refineries as well as the gss stations across the state. Speedway is one of the leading gas stations with over 400 stations across the Michigan to lead the state in the price spike. While profit to the manufacturer/refiner/gas station is a desired part of any business model. Ruthless cheating should be made legal by our law makers! Michigan does not count among the richest per capita state in the US however, we pay the highest gas prices. Most of the Michiganders have an average salary that is close the national median income! What makes gas to expensive to buy in Michigan? Please explain. Do not offer a formula to calculate the gas price on your site while the factor needed to put in that formula are closely guarded secrets of oil industry where an end-buyer doesn’t know how a price hike is justified other than the “unknown refinery problem” and believe that to pay ridiculously high gas prices while the rest of the nation is not suffering the same refinery issue!

    I request your most urgent attention and action into this issue and bring some order into the chaotic business of oil industry and the gas prices in the Michigan.

    Thank you and Sincerely.

  32. seems like some respite on the way! dropping to $4.049 in Grand Rapids area. Good thought of writing to AG akash!

  33. Akash,

    I doubt the AG can be of much help considering virtually all the oil is regulated at the federal level as ‘interstate commerce’.

  34. No disrespect to akash because i feel the same, but The AG doesn’t give a crap what we ask or say. He just shrugs us off.

  35. Thanks Norm and hubie24 for your inputs, I agree the AG will not give a crap nor our other law makers however, it should not discourage us from approaching them and addressing the issues that matters to us and affect the daily decision making of many. The more of us will express our concerns, the more they will have to respond. Initially they may ignore, avoid and shrug off but eventually they will have to respond. No one gets to the power without ‘we the people.’

  36. One of the real problems is that the states of Indiana and Michigan get rich off the high price of gasoline. They are two of the very few states that collect sales tax on gasoline besides all the road and use taxes. So a higher price, means increased collections. Right now, that is accounting for 21 to 25 cents per gallon of the sale price.

  37. I noticed that too TimmP on the sales tax deal. And of course Indiana’s sales tax went up to 7% a few years back in exchange for a cap on property taxes. Hmmmmmmm.

    Oh some good news. The gas station closest to home has DROPPED A PENNY to $4.18!!!!!

  38. Premium in the city of Chicago is now over $5. $5.05 to be exact ! Yes I know it more expensive in Chicago, but we are being groomed for the “magic fin” for a gallon of gas !

  39. I wonder when the hurricane is going to bump us up to $5 a gal? in the Great Lakes region. Is $5 actually foreseeable this Summer? If so MI is gonna be hurting BAD. Our economy is going to tank again if we haven’t yet came out of the recession.

  40. Here is an interesting article I read in the Grand Rapids Business Journal today. Just thought I’d post it.

  41. saw this news at the wood tv 8. seems that the news suggests that Michganders are the only one in the whole wide US to consume gas and thus suffer due to raising prices and the rest of the americans are scarcely using the gas! either this news is written in hurry or the newsman doesn’t want to expose the ill doing of oil industry and is rather blaming the Michiganders for the price rise. Are we so much driving? compared to the rest of the US!

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