AAA Michigan reports that the statewide average daily gas price increased about 16 cents since last week in the wake of damage to Texas by Hurricane Harvey.
Michigan’s current daily statewide average is about $2.62 per gallon, about 16 cents more than last week’s average and about 32 cents more than this same time last year. The price increase comes as gasoline inventory also increases.
According to AAA, gas prices have the potential to increase another 10 to 20 cents in the coming week, but they are expected to decline towards the end of September and beginning of October. Gasoline shortages are not expected.
AAA said once Gulf Coast refineries begin to re-open there will be a clearer picture of long-term gas prices. More than a dozen refineries were shut down, closing more than a quarter of the nation’s refining capacity.
It is important to note that price increases seen across the country do not reflect a shortage of gasoline supplies, but rather are reacting to the inability to transport fuel out of the Gulf Coast and into other areas.
Current U.S. gasoline inventories sit at a surplus with 230 million barrels.
The Department of Energy released one million barrels of oil from the Strategic Petroleum Reserve to help offset the lack of supply from the Gulf Coast.
As the emergency situation evolves, refiners in other regions, additional imports and alternative transportation routes may be needed to fill any gaps in meeting demand during the aftermath of the storm -– all of which could tighten supply and add extra costs to getting gasoline to the pump.
It is still too soon for the market to know how badly damaged energy infrastructure is from the storm, but the coming days will offer more insight into how long recovery and restoration may take.
--Macomb Daily Staff