Whiting, Indiana refinery problems blamed for gas hike

refinery-in-whiting-indiana

As one analyst had predicted, gas prices have spiked again throughout Indiana.

Many stations raised prices to 2.99/gallon just one day after raising them to the 2.59/gallon range, all because of a major interruption in production from BP’s refinery in Whiting. The refinery’s main crude distillation unit suffered major damage over the weekend, affecting about half the refinery’s gasoline production capacity according to Patrick DeHaan, senior petroleum analyst with GasBuddy.com. The interruption in the supply chain has affected gas prices throughout the Great Lakes region, which includes Indiana, Illinois and Michigan.

Wholesale gas prices had spiked prior to many stations raising their prices, as BP initially said the refinery unit would be down anywhere from 7 to 12 days. Now, Reuters is reporting that it may take up to a month to repair the damage. DeHaan says BP is attempting to bring gasoline in from other regions to make up for its drop in production.

Wholesale gas prices were also likely affected by the federal government’s weekly report on the amount of gas and oil on hand. DeHaan says the Energy Information Administration’s report showed that even though Midwest refineries were operating at 99-percent capacity prior to the Whiting breakdown, oil inventories fell by a million barrels, indicating a high level of demand during peak summer driving season.