Refinery problems fuel higher gas costs

A flood stopped production at one while a fire slowed operations at a second location.
Sunday, July 15, 2007 | 2:00 a.m. CDT; updated 11:25 a.m. CDT, Saturday, July 19, 2008

Gasoline prices have been rising and probably won’t be coming down soon.

The going price for regular unleaded gasoline in Columbia on Saturday was $2.99 a gallon.

Problems at two refineries in the Midwest that help supply the region are part of the reason for the increase in price. A refinery in Coffeyville, Kan., was shut down because of flooding on June 30 and remains closed. Operations at a Whiting, Ind., refinery have been reduced since March because of a fire.

“We don’t anticipate refineries coming back online anytime soon, especially for the Coffeyville refinery, so we expect prices will remain high for the foreseeable future,” Robert Leone, president of the Missouri Petroleum Marketers & Convenience Store Association, said Friday.

Prices have gone up because suppliers to the local stations now have to travel farther to get the gasoline they need, Leone said.

Missouri’s average retail price for regular unleaded gasoline rose from $2.83 per gallon to $2.98, an increase of 5 percent, in the past three weeks, according to a July 10 report by the Department of Natural Resources’ Energy Center. Missouri’s average price is identical to the U.S. average and below the Midwest average of $3.04 a gallon. Average prices are up 15 cents from one year ago.

Average Midwest gasoline prices have been higher than the national average this year. Higher prices are usually seen on the East and West coasts, said Kerry Cordray, spokesman for the Energy Center.

Another reason for higher prices is increased summer travel, Cordray said. The Energy Center report said national gasoline prices are up by 1.4 percent compared with last year. The increased demand plus decreased supply leads to higher prices.

“I’m not sure if people are driving further or faster or in less efficient vehicles, but most likely, the biggest contributing factor is more vehicle miles,” Cordray said.

Other factors are contributing to high gasoline prices. Unrest in the Middle East, Venezuela and Nigeria, all major crude oil producers, has raised prices worldwide, the Energy Center report said.

The center surveys selected gasoline stations throughout Missouri and releases a report on average prices every two weeks.

Prices have continued to increase since the most recent survey, which was completed and released Tuesday, Cordray said. The report looked at prices from June 21 to Tuesday. The report gives a historical perspective of prices but does not predict prices.

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