Cost of Crude Oil, Switch to Summer Blend Driving Gas Prices Up

Posted on March 31, 2017
Author Michael Gallenberger, WKVI

Gas prices are heading up. GasBuddy.com Senior Petroleum Analyst Patrick DeHaan says Indiana and some other neighboring states have seen a notable jump in prices. “Prices in Indiana tend to engage in a price cycling behavior, we’ll call it, in which gas prices plummet and then proceed to spike,” he explains. “And that’s what we saw earlier this week with most stations going up to $2.39 a gallon on an account of a resurgence in the price of crude oil, which about a week ago was at about $47. [On Thursday] we saw crude oil prices breach $50.”

On top of that, gas prices are affected by seasonal refinery maintenance and the switch to summer gasoline. “That cleaner-burning gasoline generally costs more to produce, but perhaps the bigger challenge is that there’s over a dozen different types of summer gasoline in use across the county,” DeHaan says. “Not only is the cost of that summer gasoline higher, but certainly we feel a pinch from the logistical challenges behind supplying so many different varieties of summer gasoline, and unfortunately, as a result of those complexities, we generally pay a little bit more at the pump.” He says the yearly switch to summer gasoline is required by the Environmental Protection Agency.

DeHaan expects gas prices to continue to increase as summer approaches. “By and large, it’s likely that gas prices will continue to lurch forward every week or so,” he says, “and that could bring gas prices into the upper two-dollar-a-gallon range by Memorial Day weekend.”

Meanwhile, AAA has released a survey showing that nearly a quarter of consumers believe gas prices are already too high. AAA says that many American families still plan to take a road trip this summer, but will travel to closer destinations like national parks and theme parks.