Chicago Area Gas Prices Spike Over $4 Per Gallon
Expert: Local Fuel Prices On Record Breaking Pace
In just the past week, local gas prices have jumped 20¢ per gallon, pushing average prices in the Chicagoland area over the $4 per gallon barrier, according to the gas price tracking website, ChicagoGasPrices.com.
Wednesday’s average price of $4.04 per gallon is just pennies under a $1 more than a year ago.
But Chicago motorists are intimately aware that gas prices inside city limits are considerably higher than the $4.04 per gallon average price for the area, with some gas stations selling regular for as much as $4.39 per gallon.
Fuel prices have been rising steadily for the past few months locally and nationwide due to climbing crude oil prices and unrest in the Middle East. The current national average for gas is $3.67 per gallon.
But this past week has seen abrupt and significant jumps in the price of oil, with crude oil hitting $108.47 per barrel on Monday, the highest closing price for oil since September of 2008.
Yet, Chicago is seeing additional market pressures that are contributing to the steep climb in local prices and may even mean record breaking prices according to petroleum analyst Patrick DeHaan.
The current record price for Chicago was set in July, 2008 when the average price of regular gasoline hit $4.35 per gallon.
“I would have to say it’s a 50/50 chance we’ll break that record,” says DeHaan. “We may get close to a U.S. record price, but it’s more likely we’ll see a record in Chicago.”
DeHaan, the in-house fuel expert for national gas price tracking website Gasbuddy.com (which runs Chicagogasprices.com) explains one seasonal price pressure is the federally mandated use of reformulated gasoline. From June 1st to September 15th the EPA requires gas stations to sell this cleaner burning fuel in areas of the country with the most air pollution.
“Prices go up when we have laws mandating pollution,” says DeHaan. “Reformulated or Summer Spec gas, meet federal requirements for reduced emissions. But it costs more to produce.”
In addition, DeHaan says BP’s Whiting, Indiana oil refinery plant will be going through regular maintenance beginning later this week for a minimum of three to as many as seven weeks. BP’s Whiting plant is the company’s second largest in America, the 6th largest in the entire county and accounts for approximately 20% of the area’s gas production.
DeHaan believes this is just another thing that will contribute to rising area gas prices.
“Generally, refineries try to get back on line before Memorial Day (considered the official kickoff of the driving season),” explains DeHaan. “We could be looking at more pain in the pump until then.”
While BP spokesperson Scott Dean would not confirm the company’s Whiting refinery would be undergoing maintenance, he was dismissive of DeHaan’s general assertion regarding the impact of maintenance on the local gas supply.
“You rarely shut down a refinery completely,” explained Dean. “Clearly, it’s (maintenance) a scheduled process. I think he’s grossly overstating the situation. The refinery is producing all the time.”
Plus, Dean, who’s based out of BP’s Naperville offices, says BP’s Whiting plant is not the only refinery in the area, with a Citgo refinery located in Lemont and Exxon with refinery in Joliet.
Dean says the main thing that affects gas pricing is the cost of oil, which is still a long way from the $143 per barrel pricing of mid-2008 that helped drive national and local gas prices to record levels.
“The biggest factor in the price of gas is the cost of crude oil,” says Dean. “They follow each other very closely. This is a very reliable bell weather. The second is biggest factor is taxes.”