Gas prices spike again in Ann Arbor area, but relief may be on the way
Gasoline prices in southeast Michigan — which have bounced around in recent weeks — are back up.
According to Gasbuddy.com data, prices in Ann Arbor rose 15 cents in the last week alone while prices across the country dropped an average of 1 cent.
According to Patrick DeHaan, Gasbuddy.com senior petroleum analyst, two pipelines from Canada to Midwestern refineries, experienced leaks over the past month and three refineries — owned by Exxon, Citgo, and Marathon — experienced technical difficulties.
He said at least some of these difficulties could be directly attributed to the recent storms in the region.
“Five major stories like this can really drive up wholesale prices in the region,” DeHaan said, referring to the events. “And it really only affected the region because they were very local problems.”
According to DeHaan, when wholesale prices go up, station owners are forced to raise their prices, but local competitors also factor into pricing decisions.
Thanks to intense competition, Ypsilanti’s gas prices have fallen more quickly than neighboring towns.
Today, prices were more than 30 cents a gallon cheaper in Ypsilanti than some other locations in Washtenaw County.
DeHaan also had good news for Ann Arbor residents: These local price disparities often signal a looming drop in prices.
“Now that these leaks and problems are being taken care of, prices should start to go down across the region,” he said. “Prices drop more quickly in some areas than others.”
He theorized that Ypsilanti gas stations had experienced a faster drop in prices to balance out consumer demand, which fell faster when prices rose.
Ben Freed is an intern for AnnArbor.com. Reach him at benjaminfreed@annarbor.com.
Comments
gpg
Tue, Jun 7, 2011 : 1:02 p.m.
Quit buying more than the minimum amount of gas you need. Take public transportation where possible. Plan trips to combine tasks. Buy nothing but gas from the gas station. Get a more fuel efficient vehicle (if possible). If the demand goes down so will the prices. I commute daily and run as many errands as possible by scooter - rain, shine (but no ice or snowy roads) it matters not (so please watch out for motorcycles, scooters, and bicycles) but that 90+ mpg certainly helps a lot - one $4 fill up and I will see you next week. Prices are not going to change much since the oil companies know that we will continue to buy their products at nearly the same rate, insuring their record profits again this year. Until that changes, the prices will continue to fluctuate higher and higher until they find the pressure point.
rs
Tue, Jun 7, 2011 : 12:01 p.m.
If these pipeline and refinery "problems" affect a region, why is gas $.30 cheaper in Lansing? The Midwest and Canadian supply problems don't affect Lansing like it does Ann Arbor? The high A2 gas prices come from greedy A2 station owners. Ypsi gas stations can sell gas $.15 cheaper and still make a profit and they are buying gasoline off the same tanker truck that the A2 stations are. I'm guessing the Lansing stations are paying closer to the same price for gas that the A2 stations are too. Its just price gouging on every level that equals $4.20 gas, not a leaky pipeline over 1000 miles away or undisclosed events at a refinery. (Weird that they won't say whats wrong at the refineries, just "Technical Difficulties". They must have a former television station manager running things now.)
Ben Freed
Tue, Jun 7, 2011 : 1:27 p.m.
rs: I apologize for not being more specific about the problems at the refineries. One refinery experienced an unexpected flare, a second had a boiler leak, and a third had power outages due to recent storms in the region. I did not think that the specific refinery problems were necessary to include in the story. Also, if you look at this graph provided by gasbuddy.com: <a href="http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=24" rel='nofollow'>http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=24</a> you can see that gas prices in Lansing fall more quickly than those in A2, but spike at about the same time at about the same rate. This would indicate that they are affected by the same wholesale price spikes, they simply bring they're prices down more quickly (in a pattern similar to Ypsilanti)
Tintin Milou
Tue, Jun 7, 2011 : 3:51 a.m.
To all those complaining about 'high' prices: A good way to save money and hair is to make less use of your car! Pretty easy once you think about it.
ypsicat
Tue, Jun 7, 2011 : 1:50 a.m.
I'm no longer living in Ypsi but before and after living there I made and now make a special trip to buy gas, also beer and more recently, Pacific Beach Burrito take out, yum. I haven't bought gas in Ann Arbor since 2007. It's a rip off.
CynicA2
Tue, Jun 7, 2011 : 12:28 a.m.
Bernanke and the Fed have ennabled the speculative price boom in ALL commodities. Interest rates are effectively zero for the big investment banks, hedge funds, and other money manipulators who have driven this "next" bubble. "Quantitative Easing" I and II, the Fed's other stimulus measure, has flooded the financial markets with dollars, devaluing them further. All the Fed has to do is start raising interest rates, and margin requirements in the futures markets, and this commodity price bubble will collapse, and the speculative excesses will be wrung-out of the markets. Pricing may then return to something resembling supply and demand fundamentals, and we consumers may get some real relief at the pump and the check-out aisle.
CynicA2
Tue, Jun 7, 2011 : 8:48 p.m.
You forgot the Russkies in your acronym. It is BRIC, not BIC, but no worries. What you say is partially true, but not root cause of the current bubble. Demand has increased only gradually over the past decade or so - nothing that would justify doubling, tripling, or even quadrupling of prices for various commodities. But, devaluing the dollar by keeping monetary policy to easy, and fiscal policy too profligate, for too long a period of time, will result in exactly what we have now, because the dollar is still THE benchmark international currency, and the US is still the largest economy, by a healthy margin. A stronger dollar, fostered by higher interest rates from the Fed, will lower commodity prices significantly, and actually stimulate the economy, because all manner of things will get cheaper at the consumer level.
John B.
Tue, Jun 7, 2011 : 6:40 p.m.
I hear you, but it's not really that simple. We don't operate in isolation. We operate in an increasingly-interconnected Global marketplace. Demand for oil (and grains, and many, many other basic commodities) is increasing rapidly in places like the BIC nations - Brazil, India, and China), driving up prices. We can do all we want domestically, but it won't change that fact.
psaume23
Tue, Jun 7, 2011 : 12:10 a.m.
We will not buy gasoline in Ann Arbor because the prices are always higher than in other towns around. The overall gas price situation appears to be advantage-taking by the big oil companies, and locally, not very nice or civic-minded behavior of the local gas stations. But ultimately it is the doing of the GOP. The big oil companies keep on making record-breaking profits, and the Republicans want the oil companies to keep their subsidies and prevent regulation of oil companies. When are voters going to understand that with high gas prices (and health care, and banking regulation, etc., etc) , the GOP will never act in the interests of working people and the middle class? The drill-baby-drill dreck, if brought to fruition, would ultimately boost the profits of big oil, not consistently bring down gas prices. The answer is an abolition of all subsidies for oil companies, and strong and effective federal price regulation.
townie54
Mon, Jun 6, 2011 : 11:41 p.m.
every year about a month and a half before memorial day fuel prices go up and two or three weeks after they fall.There is always some fake reason they use for the spike.The real reason is to make their multi billion dollar profit before the summer travel season when they know they will be selling a lot more gas for people driving to vacations,amusement parks etc..The politicians are happy with that.
Tom Joad
Mon, Jun 6, 2011 : 10:14 p.m.
Peak oil coupled to insatiable demand by China, India and the rest of the world..
Ben Freed
Mon, Jun 6, 2011 : 9:49 p.m.
While it may seem like gauging, price differentials in Ann Arbor and Ypsilanti are the result of higher levels of competition in Ypsilanti and people in Ann Arbor being unwilling to drive an extra few miles to get a cheaper gallon of gas. The local owners of gas stations do not make a lot of money per gallon, and are at the whim of wholesale gas prices. However, those in more affluent areas do tend to wait longer to bring down their prices after a steep hike. With the Trans-Canada pipeline fixed and the refineries back online, we should see prices go down over the next couple weeks. And @treetowncartel, I agree that it would be beneficial for gas companies to put their profits first into improving infrastructure, and then into dividends. While we cannot control what speculators do to the price of crude oil, it would be nice to see the companies making sure that issues like this did not arise. Also, @gramma, watch for an article tomorrow about one non-profit encouraging people to change their commute habits to save gas.
Bellicoster
Mon, Jun 6, 2011 : 9:25 p.m.
$4.00 a gallon still seems ridiculously cheap when you think about what you get. For half an hour's work at minimum wage, one can haul a couple tons of materials at least ten miles. Gas is still cheap.
John B.
Mon, Jun 6, 2011 : 9:49 p.m.
Yep, and elsewhere they pay $5-10 per gallon in most cases (at least where it isn't subsidized by the central government to prevent riots due to other oppressive aspects of those particular regimes).
mojo
Mon, Jun 6, 2011 : 9:15 p.m.
We need more oil Competition - end of story. . More refineries (we only have some 100+ facilities across the country - a security risk). More drilling. More Gasoline companies. More distributors. Less taxes (oil is one of the most taxed products in the country - from drilling 'fees' to 'licensing' pipelines and fuel trucking to refining regulations to multi-retail taxes on end us users.) The cost to get one gallon to market is outrageous.
John B.
Mon, Jun 6, 2011 : 9:47 p.m.
Gasoline is taxed far too little in the USA. That has been obvious for decades.
russellr
Mon, Jun 6, 2011 : 9:04 p.m.
Ypsilanti and Taylor gas yesterday (Sunday) was $3.99 gallon. Ann Arbor Sunday was $4.19 and up. The only reason why is because the gas companies know people in Ann Arbor make more money. This is gouging and should be stopped by our politicians. You can't tell me these other cities get to buy there gas cheaper than Ann Arbor. Come on and do something about it or get rid of half the polititions in Lansing!!!!
Karen
Mon, Jun 6, 2011 : 11:48 p.m.
So go buy gas in Ypsilanti. Or better yet - move to Ypsi if you don't like being milked by the Democrat City council. Stop whining about the politicians - they are only interested in being re-elected. And stop waiting for politicians to do something...do it yourself. We buy our groceries at Kroger and use their fuel points at their fuel station - saved a bundle so far. And I didn't notice any politicians involved in the saving.
John B.
Mon, Jun 6, 2011 : 9:45 p.m.
Or maybe it costs more to buy and operate a gas station in Ann Arbor than Ypsi.? I'm no friend of Big Oil, quite the contrary, but some folks need to chill a bit. Seriously. Now, if you wan to talk about having insufficient refinery capacity here in the US, that I can dig, you dig?
Jake C
Mon, Jun 6, 2011 : 9:39 p.m.
It could be price gouging, or it could be that property values and taxes are higher in the Ann Arbor area. Which do you think is more likely?
Mike Martin
Mon, Jun 6, 2011 : 8:23 p.m.
A significant factor in the high price of gas is the Obama administration's low dollar policy and Berneke's flooding the market with US dollars (QE2). Oil is an international commodity priced in dollars and a weak dollar means it costs more to buy that commodity. The administration wants to see more US exports abroad - an excellent goal. Cheap dollars was part of that plan. As with all manipulations in the market there are balancing consequences and expensive oil is one of them. The current dip in economic indicators partially due to high gas costs is another.
Edward R Murrow's Ghost
Tue, Jun 7, 2011 : 1:45 p.m.
One other thought occurs: The price of oil fell below $100 yesterday and therefore is is 30% lower than the all-time high of June 2008 ($140) and is 12% lower than the recent price spike ($113 in April 2011). Source: <a href="http://www.nyse.tv/crude-oil-price-history.htm" rel='nofollow'>http://www.nyse.tv/crude-oil-price-history.htm</a> These prices, of course, take into account the value of the dollar, whatever it might have been at the time. So, despite substantial drops in the price of oil, the price of gas has jumped. Neither the value of the dollar nor the price of oil can therefore explain the spike in gas prices. One last thought: the dollar was weaker under the Bush administration than under the Obama administration, and maintained purposely so. Anyone who complains about the latter without also complaining about the former is being hypocritical. You know, kind of like complaining about Obama's deficits while not saying a peep when the debt more than doubled under Bush II. Good Night and Good Luck Good Night and Good Luck
Edward R Murrow's Ghost
Tue, Jun 7, 2011 : 11:04 a.m.
Yes, and if the dollar devalues, American-made goods are cheaper overseas, thereby encouraging exports and discouraging imports. Were the Obama administration to pursue a policy of a stronger dollar, it would be criticized for harming the American export market. Good Night and Good Luck
sbbuilder
Mon, Jun 6, 2011 : 10:28 p.m.
John B. Ummm, if the dollar devaluates on the international exchange, it costs more to buy oil, or anything else imported. Econ 101.
John B.
Mon, Jun 6, 2011 : 9:42 p.m.
Umm, oil is priced in, and sells in, US Dollars. I think we can buy those at about one-for-one, last time I checked.
treetowncartel
Mon, Jun 6, 2011 : 7:55 p.m.
How about putting some of those profits back into the infrastructure, e.g. refineries,pipelines and the like?
John B.
Mon, Jun 6, 2011 : 9:40 p.m.
...and folks, Steve is being sarcastic, just in case you missed that. You're welcome.
Steve
Mon, Jun 6, 2011 : 8:10 p.m.
Limiting American greed for the good of the nation? Now that's socialism.
Kevin McGuinness
Mon, Jun 6, 2011 : 7:47 p.m.
I worked for the auto industry all my life and was glad that President Obama decided to make an investment in the American Industry and all the people who have worked hard to make in competitive. While the congressional fat cats pontificated from their cushy positions people like Mitch Romney with no faith in America said let it failed you did the right thing. I do not hear the stalwarts of free enterprise talking about runaway prices for gas in the midwest. The oil companies are allowed to just pass on their inefficiencies to the public because there is NO FREE enterprise at the gas PUMP. We are held hostage. I say it is time for some price controls on this industry. It is NOT free enterprise. they pass along their incompetence as the regional price hikes in Michigan demonstrate. If they want to live off of the publicly funded tax breaks they should adhere to publicly controlled prices on a national basis.
dae
Mon, Jun 6, 2011 : 7:45 p.m.
"Blame the severe weather across the Midwest in the past month, which has led to regional gas price spikes even as the rest of the country saw prices fall." NO! BLAME THE SPECULATORS! THEY ARE ALL TO FAULT FOR GAS PRICES! Gas should not cost more than $2 to $2.50 at the most. Every time there was a little issue the prices were jacked up and never returned to where they should be. The gas companies are partially to blame as well as our politicians who have sat idle doing nothing. Our politicans have allowed this to happen and "We the People" are becoming We the Poor while the oil companies laugh all the way to the bank with $300,000,000+ in profit DAILY. If they are making so much profit, then why the high prices? Meanwhile, the economy is tanking, people are losing their jobs and/or participating less in the economy, and there's the threats of higher taxes to pay the states' and the nation's debts. Nearly 40 years ago, we had a foreign oil crisis. Why haven't we solved this? Why haven't we evolved our vehicles over the past 40 decades? (Mind you, we like our big SUVs and pickups and sedans and most people wouldn't be caught dead in the little rollerskate or ugly looking so-called hybrid/electric cars.) LET'S RETURN OIL PRICES TO WHERE THEY RIGHTFULLY BELONG OR GET RID OF THE FOREIGN SCREW JOB WE'RE RECEIVING!
John B.
Mon, Jun 6, 2011 : 9:38 p.m.
Ummm....
Mr. Ed
Mon, Jun 6, 2011 : 7:09 p.m.
The wind will be blowing from the North, it may drive prices back up.