Gas prices to spike 50¢ to $1 per gallon in the corn belt

Late-season refinery issues ahead
of switch to winter gas cause squeeze

(September 11, 2023) DALLAS — Drivers in Oklahoma, Missouri, South Dakota, North Dakota, Nebraska, Minnesota and Kansas — be ready. GasBuddy, a fuel savings platform for North American drivers, predicts that gas prices in these states will spike anywhere from 50¢ to $1 per gallon over the next several days. While there are few details on the particulars on what is driving the increase, trade sources tell GasBuddy a refinery outage may be to blame.

“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.  

“While a waiver from the EPA to allow the switch to winter gasoline now could happen, what we absolutely know is that without action, gasoline prices are about to spike in a significant way and motorists should be prepared for increases that could last until a waiver is issued, or the change to winter gasoline happens on Sept. 16.

The spike in gas prices may be relatively short-lived, but the situation remains volatile.

As of last Friday wholesale gasoline prices in the region were up nearly $1 per gallon from a week ago, meaning that retailers that buy new supplies of gasoline will likely have to raise their price substantially to avoid losing money. Stations will likely start raising prices significantly in the hours ahead to avoid this.

To avoid overpaying, drivers in the mentioned states should fill up immediately before price spikes reach their local station.