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Closure Of BP Refinery Sends Gasoline Prices Soaring In The Midwest


If you're listening to us in the Midwest, you might be wondering, what's this talk about low oil prices? Gas prices there are up and up sharply. Well, that's because parts of a huge refinery in Indiana have been shut down, and if the disruption lasts long enough, NPR's Jeff Brady reports, its effects could reverberate beyond the Midwest.

JEFF BRADY, BYLINE: A gallon of regular gas in Chicago sells for about 50 cents more today than it did a week ago. At a station on the North Side, Elena Marcheschi has noticed.

ELENA MARCHESCHI: I've just retired, and it's going to be a big impact in my life.

BRADY: Marcheschi was planning to take the bus, but she needs to go to the doctor, and that wasn't convenient.

MARCHESCHI: I didn't have a choice today, but I will be driving less.

BRADY: At the same station, James Armour says he's ready for gas prices to start following oil prices down.

JAMES ARMOUR: I use my car every day to get work, and I'm in my car every day for work. So it'd be great if this refinery could get fixed.

BRADY: Oil company BP last Saturday shut down part of its Whiting, Ind., refinery for, quote, "unscheduled repair work." That's about as specific as refineries get about their operations. BP says it's fixing the problem. Meantime, the Midwest has missed out on low oil prices. Tom Kloza is the global head of energy analysis for the firm Oil Prince Information Service.

TOM KLOZA: We're flirting with the six-year lows for crude oil, and yet, in certain parts of the country, people are seeing gasoline price spikes of 10, 15, 20 or even 50 cents a gallon in the upper Midwest.

BRADY: Kloza says gas doesn't store well, so it's refined not long before it's burned in your car. Any disruption at refinery sends suppliers scrambling to secure enough fuel to fill their tanks. They bid up prices in the process. Kloza expects Chicago and the rest of the country will see lower gas prices soon, certainly next month when refineries switch over to their winter blends which are less expensive to produce.

KLOZA: And that combined with people driving less after Labor Day should create a much more balanced market.

BRADY: Kloza says if low oil prices hold, gasoline likely will fall to a national average of just above $2 a gallon in coming months. Jeff Brady, NPR News. Transcript provided by NPR, Copyright NPR.

Jeff Brady is a National Desk Correspondent based in Philadelphia, where he covers energy issues and climate change. Brady helped establish NPR's environment and energy collaborative which brings together NPR and Member station reporters from across the country to cover the big stories involving the natural world.