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Indiana Refinery Outage Causes Gas Price Spike Across Midwest

Mike Mozart

On the same day oil prices reached their lowest level in more than six years, gas prices in central Indiana are going up.

Even as many Indianapolis-area stations raised the price of self-serve regular unleaded to nearly $2.60 per gallon, an increase of 30 cents per gallon or more, the price of oil dropped below $44 a barrel.

But senior petroleum analyst Patrick DeHaan says the two are unrelated. He says the spike is caused by one of the largest units at BP’s Whiting, Indiana refinery going down.

“It's called a crude distillation unit. It distills crude oil and is turned into gasoline, and the problem now is gasoline supply as a result of that major outage. That is something that could last seven to ten days,” DeHaan says.

The outage affects up to half the typical production of gasoline from the Whiting refinery.

The price increases are affecting other Midwestern states, too, though DeHaan says the spike is largely confined to the Great Lakes region.

“If you were, to say, travel south into Tennessee or Alabama or say, west, to Kansas or Nebraska, this is something that you’re not going to feel. So, this is something isolated to the area that this refinery serves,” DeHaan says.

Since demand for gasoline has been relatively high lately and supply, at least from Whiting, is expected to remain low, prices could go even higher this week before they come back down.