Refinery Maintenance Sends Gas Prices Higher

Michael Green Contact Tile(WASHINGTON, October 12, 2015) After 13 consecutive days of holding steady at $2.29 per gallon, the national average price for regular unleaded gasoline began ticking higher last week, reaching today’s price of $2.31 per gallon. Today’s average represents an increase of two cents per gallon compared to one week ago; however prices have fallen for 46 of the past 56 days for a total of 36 cents per gallon. On the whole, pump prices remain discounted across the country, and drivers are saving an average of four cents per gallon month-over-month, and 89 cents per gallon year-over-year.


The refinery maintenance season is reportedly nearing its peak, and the national average has been relatively stable since September 15. While national prices have been steady, pump prices in some regions have moved dramatically over this same period, largely due to fluctuations in supply and demand. Averages in the Midwest remain under pressure due to a growing list of both planned and unplanned maintenance for refineries located in the region. According to the U.S. Energy Information Administration, the Midwest refinery utilization rate fell below 80 percent for the first time since 2013, which means production was running well below capacity. Prior to the start of the fall turnaround season, the Midwest refinery utilization rate was nearly 99 percent, and this marked decline is contributing to tightening supply in the region. Ample domestic supplies are expected to temper any regional price spikes, preventing the national average from moving dramatically higher. Before the end of the year, drivers could still see the national average fall below $2 per gallon for the first time since 2009, assuming crude oil prices do not increase and there are not unexpected disruptions to supply.

For the second week in a row, retail averages are below $3 per gallon in every state. California ($2.91) remains the nation’s most expensive market for retail gasoline and is joined by Hawaii ($2.88), Nevada ($2.86), Alaska ($2.74) and Illinois ($2.58) in the rankings as the top five most expensive markets. Motorists in South Carolina ($1.97) and New Jersey ($1.98) are paying averages below $2 per gallon, and five additional states are within a nickel of this benchmark.


The stable national average obscures volatility in weekly price comparisons at the state level, with averages moving by double-digit increments on both ends of the spectrum. Pump prices in the majority of states (33 and Washington, D.C.) have moved higher week-over-week and averages in eight states are up by a dime or more per gallon. The Midwestern states of Iowa (+18 cents), Nebraska (+17 cents) and Minnesota (+17) are posting the largest increases in price over this same period, and consumers in a total of 13 states are paying premiums of a nickel or more per gallon. Retail averages have fallen in 17 states versus one week ago, although in a less dramatic fashion. Alaska (-17 cents) is the only state where averages are down by more than a dime per gallon, and prices are discounted by a nickel or more per gallon in a total of five states.


Regional volatility is also apparent in month-over-month price comparisons. Averages are down in 31 states and Washington, D.C., and consumers in the majority of these states (22 states) are benefiting from double-digit discounts at the pump. Six states located west of the Rockies are posting savings of more than a quarter per gallon, led by Alaska (-57 cents), Oregon (-31 cents) and Washington (-30 cents). Drivers in 19 states are paying more to refuel their vehicles versus one month ago, and the price is up by a dime or more in six states. The largest monthly premiums are seen in the Midwestern states of Indiana (+30 cents), Ohio (+23 cents) and Minnesota (+22 cents).

Despite the regional fluctuations in price, year-over-year discounts persist in every state and Washington, D.C. Pump prices are down in 36 states and Washington, D.C. by 75 cents per gallon or more, and motorists in 18 states are saving $1 or more compared to this same date last year. Drivers in Hawaii (-$1.25), Connecticut (-$1.17) and Vermont (-$1.16) are saving the most per gallon over this period.

The global oil market remains in flux and speculation about the future direction of the market continues to be focused on questions of supply and demand. Both crude oil benchmarks, West Texas Intermediate and Brent, posted weekly gains, but there is uncertainty of the direction that prices will move in the months ahead. The general secretary for OPEC has provided little insight about the cartel’s plans for future production, however he did state the belief that market fundamentals are contributing to non-OPEC countries reducing their output. Geopolitical instability in the Middle East and Russia’s plans for production are also font of mind, and prices are expected to remain volatile in the near term.

Domestic oil prices had an end-of-week boost driven by a weakening U.S. dollar and news that U.S. oil rigs were down by nine from the week prior. WTI closed out Friday’s formal trading session up 20 cents, settling at $49.63 per barrel. This represents a week-over-week gain of approximately $4 per barrel, marking the largest weekly increase since mid-July.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at

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