The surge in gas prices across MN was not unnoticed last week. The prices jumped up to 40 cents per gallon in some areas. Locally we were just shy of the $4 per gallon mark. Gas Buddy says that an unexpected shut down of a refinery was to blame for the massive spike in prices. Analysts do predict prices coming down, winter blend fuel will go into effect this weekend.
“The details on the outage generally lag the response we see in wholesale gasoline prices, due to the nature of these situations. A refinery that goes down has contractual obligations to supply certain volumes of gasoline to stations. If an unexpected outage happens, the refinery that goes down suddenly may not have enough supply to meet its obligations and has to find another refinery to buy from. This can push prices up considerably, as a refinery could be a very large buyer. Adding in that we’re just a week away from the switch to cheaper winter gasoline, we have a very large, but temporary squeeze in the market,” said Patrick De Haan, head of petroleum analysis at GasBuddy.