As the refinery shut down along the Gulf Coast, expecting Tropical Strom Isaac and shutdown in Illinois, Michigan, gas prices are expected to mount $4 a gallon.
On 27th August 2012, the average gasoline price was $3.93, which was four cents higher than AAA Michigan. On account of refinery closing and the shutdown of a West Shore Pipe Line Co., a 650-mile pipeline in suburban Chicago, the prices will reach more than $4 a gallon on 28th August 2012.
Patrick DeHaan said: “Michigan will see one of its infamous spikes by 28th August 2012 in the morning.” Adding to his points, he said: refineries will take the time to restart and replenish supplies, presumably after high-fuel-demand on Labour Day weekend.
Oil industry analysts don’t have the same assumption about increasing prices. Tom Kloza of the Oil Price Information Service said: ‘the national price of gas is likely to go up to five cents a gallon by the weekend. However, Phil Flynn, a senior market analyst at Price Futures Group in Chicago, predicts 25-cent as a minimum hike.
On 28th August 2012, gas futures prices strike a four-month high, closing at $3.155 a gallon, a 24 % hike after 21st June 2012 when the price was $2.55 a gallon.
There are many reasons for rising prices; one main reason is the shutdown of refineries along the Gulf Coast because of high winds and heavy rains due to Tropical Strom Isaac. Another reason is a fire at a large Venezuelan refinery.
In 2012, the average price of gas in Metro had hit $4 a gallon or higher, almost thrice. In late January, the lowest price was $3.32 a gallon, while the highest price was $4.08 a gallon in late March.