Motorists are still gritting their teeth as they head to the pumps, dealing with a spike in gasoline prices that has brought the Indiana average up to $3.98 per gallon – 35 cents higher than the national average of $3.63. Patrick DeHaan, senior petroleum analyst at GasBuddy.com, said a refinery glitch that resulted in lower production is likely to blame.
DeHaan explained that the glitch caused the affected refinery in the Great Lakes region to slow its production and forced it to purchase gasoline on the market to cover its contractual obligations.
“The laws of supply and demand dictate that when supply is so tight and demand is unchanged that prices escalate; that’s the way the free market works. Prices will rise until demand is curtailed and then supply will increase and prices will come back down,” DeHaan explained.
Because of this, DeHaan explained, prices have jumped in northwest Indiana. In Michigan and the Hoosier state, prices may spike to around $4.09 per gallon, but in northwest Indiana, the prices could climb even higher due to summer gasoline requirements.
“Most of the states in the region are seeing similar increases,” DeHaan said. “Northwest Indiana may be seeing higher prices but they’re seeing similar increases to other areas, and the reason northwest Indiana is higher in price is because of the unique type of gasoline that is required in northwest Indiana.”
DeHaan said that this unique type of gasoline, called summer-blend gasoline, is required in metropolitan areas by the EPA.
“Summer gasoline is required by the EPA. Obviously living in northwest Indiana and a big metro area like Chicago, air pollution becomes a problem in the warmer months. Summer gasoline simply burns cleaner and results in less air pollution during the summer months than would otherwise be,” DeHaan explained.
Unfortunately for drivers, there is no indication as to when these prices will go back down to a semi-reasonable level. Before the spike, the average price per gallon in Indiana was around $3.82, and just four days before that, prices were averaging $3.74.
DeHaan said there’s no light at the end of the tunnel quite yet and it may be a while before prices drop.
“It may be a few weeks before we notice any significant drop in prices under $4 a gallon,” DeHaan said.