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BP refinery shutdown driving up gas prices

Gas prices all over Michigan are rising in response to a refinery shutdown in Indiana
Ryan Grimes

Drivers all over Michigan are being hit by sticker shock at the gas pump.

Even though crude oil fell to a six-year low earlier this week, gas prices are skyrocketing.

What happened?

Patrick DeHaan of GasBuddy.com tells us this turn of events is largely due to weekend problems at the BP refinery in Whiting, Indiana, the nation’s seventh-largest refinery.

“According to sources, they had to shut down … the largest gasoline-producing unit at that refinery over the weekend due to a mechanical issue,” DeHaan says. “It sounds pretty significant.”

He says it’s unclear at this point exactly what the problem is, but a source suggested to him that the structural integrity of the unit had been compromised in some way.

BP is in the process of determining how best to fix the problem, which DeHaan tells us could take as long as a few weeks.

According to DeHaan, refineries servicing the area were already producing at almost 100% of their capacity prior to this BP incident, so there’s not a lot of room to pick up the slack.

“Now we’re in a situation where that capacity is reduced because of this outage, and perhaps demand is going to outpace supply, and the market is in a panic over what’s going on at BP,” he tells us.

DeHaan flatly dismisses the idea that behind this development is a scheme to jack up gas prices during a travel-heavy summer, explaining that crude oil and gasoline are a global commodity and there are just so many factors that influence the price.

This spike might last a few weeks, but DeHaan tells us we can expect BP to fix the issue at its refinery as fast as possible.

“Trust me, it’s not in their interest to remain down a second longer than necessary, because they’re not making money while the refinery’s down,” he says. “This is the only kink in the hose. The cheap gas prices are waiting in the fold, and unfortunately because of this refinery the hose is kinked.”

-Ryan Grimes, Stateside

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