Gas Prices Spike at the Pump; Analyst Explains Why

Posted at 7:50 PM, Jun 01, 2013
and last updated 2013-06-01 21:54:10-04

KENT COUNTY, Mich — Prices at the pump are causing sticker shock for motorists.

“I know it’s plenty of apps on my phone that could find cheaper gas,” Jerell Miller said.

Miller pulled into a Sunoco gas station on Grand Rapids’ Northeast side. He didn’t realize the price for regular unleaded was $4.15/gallon until after he parked.

In parts of West Michigan, prices for regular unleaded have climbed about thirty cents since the Memorial Day weekend. Travel spiked dramatically during that time.

“I was just thinking I won’t be doing any running around or going out of town,” Mary Milanowski said.

She asked, “Why is [gas] that costly? Does anybody know?” analyst Patrick DeHaan has an idea. FOX 17 spoke with him over the phone. He’s also written a blog with an explanation.

He said gasoline supply is already tight.

To make matters worse, an unexpected glitch occurred at an oil refinery in the Great Lakes region. That slowed production.

That Great Lakes refinery was caught buying gasoline from another refinery to try to fulfill its “contractual obligations”. According to DeHaan, word of that transaction spread and spooked the market.

As a result, DeHaan says wholesale prices have risen. That’s making cheaper transportation alternatives more enticing to some drivers.

“I might get a bike or a moped,” Miller said.