2017 has seen many Americans, especially communities living in the Midwest being affected by an increase in gasoline prices. The increase has been recorded in periods when many motorists usually experience reduced prices at the gas pumps. Latest surveys show that the increase in fuel prices has mainly been due to the ongoing maintenance work being carried out at the refineries to rectify the damage that was caused by hurricane Harvey.
The gas prices rose to an average of $2.52 for each gallon, which is 30 cents more than it was at a similar period last year. California recently introduced a 12 cent increment on gas, which has led to the spike being experienced nationwide. However, motorists in the Great Lakes States are feeling the pinch even more as the Explorer Pipeline, which normally carries gas to the upper Midwest from the Gulf coast started operating at a much-reduced capacity in October 2017.
Limited Supplies Vs. Increased Demand for Gasoline
Even though the repairs were completed in mid-November, the Midwest is yet to feel this effect as it is still operating with very limited supplies. This is a factor that has led to the high gas prices, which were partially a result of the refinery being closed to repair damages caused by hurricane Harvey.
Another factor that is contributing to the high gas prices is the increased demand for gasoline. Given that the economy has stabilized in recent weeks, many Midwest residents are choosing to hit the road, either for fun or work. This has led to reduced gas inventories.
The inventories fell by close to 4 million barrels in early November to 212.8 million barrels. The fall happened much faster than many gasoline experts had anticipated. The price of each barrel also topped the $55-dollar mark earlier this year, which led to the production costs being extended by the organization of Petroleum Exporting Countries.