GasBuddy Heat Map
OUCH. That's really all I can think of when I see gasoline prices in the Midwest. We've sent warnings to motorists via Facebook, alerted you via e-mail, and prices continue to rise.
Minnesota and the Twin Cities both hit all time record highs today. Pump prices have never been higher in these two areas. More bad news for motorists: several states may soon join Minnesota in breaking records last set in 2008.
At risk for possible record high gasoline prices in the next week or two: Iowa, Kansas, parts of Missouri, North Dakota, Oklahoma, and South Dakota. Already shattering records in Minnesota, motorists are in lines dozens of cars deep, compounding the problems that brought the high prices: tight supply.
So the biggest question many have been asking: WHY!?
A culmination of events.
1) Gasoline produced in the Plains states (IA, KS, NE, ND, SD, OK, MN) had been partially diverted to the Great Lakes a few weeks ago when refineries in the Great Lakes had gone down. Diverting supply meant less gasoline available for the Plains.
2) Refinery maintenance/outages have occurred recently- A Tulsa, OK refinery recently went down for planned maintenance, which means less production and inherently, tighter supply. In the last few days, another refinery in El Dorado, KS also went down- but unexpectedly.
3) The switch over to summer gasoline is largely the culprit in my opinion, and varying specs for summer gasoline is making things even worse. In the plains states, I count five different types of gasoline in use- three types in the state of Missouri alone! With tight supply and some refineries down, reliable supply of all of these types is very difficult.
It's so bad that the EIA says refineries are inputting the lowest amount of crude oil into their refineries for this time of year since 1990. The outcome is tightening supply that make take several weeks to build.
Another big question: how long will it last and how high will prices go?
At this writing, prices may continue rising in these seven Plains states (MN, SD, ND, KS, IA, NE, MO) for perhaps as long as another week or two. High prices may linger if motorists continue to flood enmasse to fill their vehicles. Prices will probably not come back to the high $3s for several weeks. Prices may remain high in these areas until late May or early June.
Is anyone else affected?
Yes, the Great Lakes states (MI, IN, WI, IL, OH) are also seeing prices move higher, and prices may spike soon to over $4/gal in Michigan, and Indiana, while moving very close to $4 in Ohio. Illinois and Wisconsin already see a lot of $4s in the metro areas, they may see another 5-15c/gal hike by next week. Similar reasons for the hikes- tight supply after the switch over to summer gasoline.
Hold on! The ride will likely get worse, as I indicated, before it gets better. If you're outside the Midwest you're likely not impacted as much, as price increases are set to slow down on the West Coast. The Gulf and East Coasts seem unaffected at this time, but if their shipments become diverted to more attractive markets, there could be an impact down the road.
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