Why Michigan's gas prices just surged and might hit $3

Mike Martindale, The Detroit News
·2 min read

Feb. 23—The cold weather isn't the only thing having motorists shake their heads these days.

Michigan drivers, like others across the nation, have seen the cost of gasoline surge in the past week.

AAA of Michigan reports the cost of regular unleaded fuel has gone up 17 cents — to an average pump price of $2.63 a gallon — the largest hike since October 2019. Driving these increases, according to AAA Michigan spokesperson Adrienne K. Woodland, is the recent cold weather that has affected refineries in Texas, Louisiana, Oklahoma, Arkansas, Tennessee and Kansas.

"It's not the imagination of motorists," Woodland said. "We haven't seen gas prices this high since October 2019. But Michigan's pump prices are pretty close to the average nationwide."

Problems with Midwest refineries in the past decade have helped drive up prices before in Metro Detroit and Michigan. But in 2011 and 2013, refinery issues led more expensive gas to soar past $4 a gallon and cause financial hardship for financially strapped drivers.

The price of regular unleaded fuel nationwide has been creeping up for a month. It cost $2.51 a gallon one week ago, $2.398 one month ago and $2.473 one year ago. Subsequently motorists are paying an average of $40 for a full 15-gallon tank of gas, an increase of about $1 from when prices were their highest last January.

Crude oil prices were increasing before the pandemic, Woodland said, and were creeping up in January when the unprecedented cold winter weather "crippled refineries in Texas and elsewhere."

Since then, gas supplies tightened up and pump prices increased. AAA said surveys of stations statewide found the most expensive prices in Marquette and Jackson ($2.65 a gallon); and Metro Detroit ($2.64.) The least expensive gas price averages were reported in Traverse City ($2.58), Flint ($2.62) and Saginaw ($2.63).

Gas experts expect gas prices to remain high until refineries are up and running again. About 26 refineries were shut down, Woodland said.

"At least two dozen refineries are expected to restart this week," Woodland said. "That should help to bring prices down."

Patrick DeHaan, an economist at gasbuddy.com, a national gas-pricing website for motorists, is not as optimistic as the AAA Michigan, noting crude oil prices will also need to come down.

Prices often rise in the late winter and early spring when refineries switch to more expensive fuels to meet emission rules.

"I would expect more (pump price) increases, then decreases in the months ahead," DeHaan said. "With seasonal demands, more driving and other factors, it wouldn't surprise me to see average gas prices of $3 a gallon by Memorial Day before it starts going down again."

mmartindale@detroitnews.com

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