November 27, 2014

Refinery closings, oil cost, reasons for jump in gas prices

Gasoline prices have taken giant leaps in Iowa lately, rising more than 20 cents a gallon in some cities this week and nearly 40 cents a gallon in the past month. Gail Weinholzer, spokeswoman for AAA-Iowa, says there are two primary reasons for the price hikes.

“Crude oil prices have increased dramatically over the past couple of weeks,” Weinholzer says. “It was selling at $92 a barrel, now it’s selling at $98 a barrel. Secondly, we’ve had some refinery closures, for routine maintenance as well as repair issues, six refineries across the United States and two in the Chicago area that would affect Midwest supply.”

Weinholzer says Iowans will likely be in for more price increases at the pumps in the next few weeks. “It should continue so long as the refineries are not back online,” she says. “As soon as those repairs and maintenance issues are addressed, that will provide some relief but crude oil prices, the fact they’ve been heading northerly, that’s going to have a negative impact for some time.”

Gasoline prices in Iowa are averaging $3.42 a gallon, four cents cheaper than the national average. A week ago, Iowa’s average price was $3.24 a gallon. A month ago, it was $3.14.

Cedar Rapids had the state’s biggest jump in prices, bouncing 39-cents a gallon since a month ago.

By Pat Powers, KQWC, Webster City