Average gasoline prices surge 34 cents since July 1 amid refinery problems
BY Staff and Wire reports
Saturday, August 11, 2012
8/11/12 at 5:56 AM
Read more energy stories that impact Tulsa.
A surprise surge in gasoline prices is taking some of the fun out of summer.
The national average for a gallon of gas at the pump has climbed to $3.67, an increase of 34 cents since July 1. An increase in crude oil prices and problems with refineries and pipelines in the West Coast and Midwest, including a fire in California, are mostly to blame.
Analysts don't expect gas prices to get as high as they did in April, when 10 states passed $4 a gallon and the U.S. average topped out at $3.94.
Oklahoma, which usually is among the lowest-cost states for motor fuel, ranked 28th nationally for the biggest price increase per gallon since July 1. Pump prices in the state increased almost 29 cents per gallon.
Prices rose the most in Indiana at 58.7 cents.
In Tulsa, pump prices have exceeded the state average by rising 42 cents since July 1. On Tuesday, the cost locally for a gallon of unleaded shot up 11 cents to $3.49. That total was the highest price seen in town since April 20.
"Tulsa seems to have prices rise by a dime quite frequently," said Chuck Mai, spokesman for travel club AAA-Oklahoma.
Retailers here, however, say they are just responding to the market.
"The wholesale cost just skyrocketed" in July, QuikTrip spokesman Mike Thornbrugh said earlier this week.
Mai said that rising prices throughout the state in the past six weeks can be attributed to three factors.
"There have been issues at some refineries that serve the Chicago area and a pipeline problem," he said. "As a result, some of the gasoline that usually goes to Oklahoma, Kansas and Missouri has been diverted to Chicago to meet the demand there."
In addition, he said, the drought has lowered corn production. Corn is used to produce ethanol, which makes up 10 percent of the blend in most gasoline sold.
Nationally, the rising prices could put pressure on President Barack Obama in the heat of his re-election campaign, analysts said.
When Phil Van Schepen recently went to fill up his dry-cleaning delivery van in Coon Rapids, Minn., he found a Post-it note a driver before him had placed on the pump faulting Obama for high gasoline prices.
"It's a reminder of his energy policies overall, which I don't agree with," said Van Schepen, who buys about 100 gallons a week and finds he is spending about $40 more than he did in early July. Still, he said the Post-it "was a bit much" because the president isn't responsible for gasoline prices.
Analysts and economists agree, saying prices for crude oil and wholesale gasoline are set on financial exchanges around the world based on supply and demand and expectations about how those factors may change.
Seasonal factors are also sending pump prices higher. Gas usually costs more in the late spring and summer because refiners have to make more expensive blends of gasoline to meet clean air rules and because the summer driving season boosts demand.
In the past few weeks, pipelines serving Wisconsin and Illinois ruptured, refineries were shut down unexpectedly because of equipment problems in Illinois and Indiana, and a blaze broke out at a refinery in Richmond, Calif. California drivers have seen gas climb 13 cents since the fire Monday. Motorists in many cities there are paying well more than $4.
Drivers in 20 states, including the possible White House battleground states of Colorado, Iowa, Nevada, Ohio and Wisconsin, are paying more for gasoline this year than they did last year, said Tom Kloza, chief oil analyst at the Oil Price Information Service. The national average a year ago was $3.64.
"If you are paying more than in the past, it does have the potential to hurt the president," Kloza said.
Economists said the price bump probably won't have much of an effect on economic growth, at least not yet. The extra 34 cents a gallon translates to $33 per month for a typical household.
Prices could go higher if Middle East tensions rise, more refinery problems emerge, or hurricanes in the Gulf of Mexico force oil drillers or refiners to shut down.
But analysts say that without those disruptions, gasoline will probably begin dropping after Labor Day.
Tulsa World Business Editor John Stancavage contributed to this story.
Original Print Headline: Gas prices spike
The nationwide average for a gallon of regular gasoline has risen by 34 cents since July 1. Some states have seen much larger increases because of pipeline and refinery problems, while eight others have seen a decline. Below is the difference in gas prices between July 1 and Aug. 10. All figures are in cents.
1. Indiana 58.7
2. Vermont 54.4
3. Illinois 53.9
4. Ohio 52.8
5. Kentucky 52.7
28. Oklahoma 28.8
Source: AAA, Wright Express and the Oil Price Information Service.
Trina Gonzales of Tulsa fills her car with gasoline at a QuikTrip in downtown Tulsa. The national average for a gallon of gas has climbed to $3.67, an increase of 34 cents since July 1. "The wholesale cost just skyrocketed," QuikTrip spokesman Mike Thornbrugh said. JAMES GIBBARD/Tulsa World file