Flooding during the span of Hurricane Harvey has shut down several Gulf Coast oil production operations, which is driving up gas prices in Indiana.
Oil refineries at the Gulf of Mexico account for 20 percent of the nation’s total gasoline supply.
Hoosiers get a lot of their gasoline from Northwest Indiana’s Whiting Refinery and from facilities in Illinois, but a portion also comes from the Gulf Coast.
Purdue University agricultural economist Wally Tyner says rainfall during Hurricane Harvey lasted much longer than expected, which has flooded refineries and created a shortage.
And Tyner says leaks were discovered when operators tried to reopen.
“Nothing major – there hasn’t been anything discovered yet that is a long-term shutdown, which is still possible,” Tyner says. “But, there have been some things discovered that are going to slow the process of coming back up.”
Tyner says amid the shortage, the Environmental Protection Agency has relaxed standards on summer gasoline refining, which is traditionally more expensive and takes longer.
“So, they have relaxed all those standards so they can start producing standard winter gasoline and use it for the next few weeks, until this crisis is over,” Tyner says. “That’ll speed up the production process.”
Tyner predicts the price spike will exceed 25 cents per gallon. And he says prices won’t decline until refineries and pipelines – which were also shut down – are operational again.
Tyner says Hoosiers shouldn’t expect to see a decline for at least another two weeks.
According to GasBuddy.com, the current state average is $2.52 per gallon.