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Refinery Closing Causes Midwest Gas Price Surge

Refinery Closing Causes Midwest Gas Price Surge

While gas prices are falling most places, they're rising in others

June 20th, 2012 by Mark Huffman of ConsumerAffairs in News

Motorists across the country have enjoyed the benefit of steadily falling gasoline prices in recent weeks. The national average price of self-serve regular has fallen to $3.50 a gallon.

But some motorists have actually seen prices jump in the last couple of weeks. Most of those consumers live in a handful of Midwestern states.

In Indiana, the average price of gas, as measured by the AAA Fuel Gauge Survey, is $3.69 a gallon. A week ago it was $3.59.

In Ohio, the average pump price has jumped from $3.58 to $3.69. Prices are also up by lesser amounts in Illinois and Michigan.

The reason for the surge when other states are enjoying falling prices? Indiana Attorney General Greg Zoeller says the Midwest's problems can be traced to the closing of one refinery and reduced operations at three others, all located in Illinois.

"While prices at the pump have increased so have our office's efforts to monitor and track fluctuations," Zoeller said. "It appears that this latest hike is a direct impact of the supply chain being disrupted. It is our hope that once these refineries come back online Hoosiers will start to see a lower price on the retail level."

81 percent of refining capacity

The impact is being felt throughout the region. The four refineries account for 81 percent of refining capacity in Illinois and Indiana. Zoeller said this continued decrease in supply, on a regional level, has caused the unusual increase in prices for states in the Midwest.

The Wood River refinery, the 6th largest in the country, operated by Marathon is performing annual maintenance earlier than expected this year. In addition, this refinery will be addressing environmental quality issues related to a lawsuit filed by the Illinois Attorney General's Office.

Zoeller said scheduled partial refinery closings in Illinois include Exxon Mobil in Joliet, Marathon in Robinson and CITGO in Lemont.

Zoeller said his office received 65 gas-price related complaints so far this month - with more than 90 percent of those complaints submitted last week alone. Zoeller said this month's spike in gas-price related complaints is the highest number the office has received in 2012.