News Column

Midwest Gas Prices Drop From Record High

May 30, 2013
gas pump

Gasoline prices are expected to continue falling into early summer after reaching an all-time high in Columbus, Neb., one week ago.

Analysts from both AAA Nebraska and GasBuddy.com believe the recent downward trend in gas prices will carry on into June as Midwest supplies rebound and major refineries restart production.

Columbus motorists were paying an average of $3.89 per gallon of regular unleaded gasoline Wednesday, according to AAA Nebraska's Daily Fuel Gauge report. That's 44 cents more than a month ago and a 36-cent increase from the same time last year.

But it's actually a 21-cent drop from seven days ago, when the average cost of gas in Columbus was at a record high of $4.10 per gallon of regular unleaded. The previous record high of $4.09 per gallon was set July 18, 2008.

The average price per gallon for a 10 percent ethanol blend Wednesday in Columbus was $3.82 and diesel cost $3.78.

Across the state, the average cost of a gallon of regular unleaded sat at $3.91, up 50 cents from a month ago and 40 cents from a year ago, and much higher than the national average of $3.62 per gallon.

Rose White of AAA Nebraska said the state's average gasoline price remains among the top 10 most expensive nationally -- along with several other Midwest states -- but relief is on the way.

The price spike was attributed to planned and unplanned shutdowns at refineries from Illinois to Oklahoma that caused oil production in the Midwest to dip to its lowest level in 23 years.

That decline, White said, coupled with the start of the summer travel season, drove up gasoline prices in the wholesale market.

The good news for consumers, she said, is those major refineries are expected to come back online soon and shipments from the Gulf Coast to Midwest terminals replenished supplies.

White said most Nebraska communities have seen daily declines in gas prices this week, a trend that should continue for at least the short-term.

Gregg Laskoski, a senior petroleum analyst for GasBuddy.com, also expects more relief at the pump for Midwest motorists.

He said gas prices from Oklahoma to North Dakota and east to the Great Lakes region should keep declining through June -- as long as there aren't any more unexpected refinery issues and the Gulf Coast isn't impacted by what's expected to be an active hurricane season.

"You're never going to see the kind of adjustment that you really want," Laskoski said, "but we're moving in the right direction."

Patrick DeHaan, also a senior petroleum analyst with GasBuddy.com, noted on the website that the average price of gasoline nationally declined by 24 cents and 22 cents in June during 2012 and 2011, respectively. This year, he believes it may drop 5 to 15 cents by the end of next month.

Beyond that, White said improvements to the Joliet, Ill., refinery will allow it to process a cheaper grade of crude oil coming from Canada.

Those savings, she said, could begin reaching pumps here later this year.



Source: (c)2013 the Columbus Telegram (Columbus, Neb.) Distributed by MCT Information Services


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