Gas Prices in Midwest Near $3 a Gallon on Refinery Glitch

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Joe Raymond/APThe BP Refinery in Whiting, Ind., shown here in September 2007.
By Robert Gibbons

NEW YORK -- Retail gasoline prices in Midwest states have jumped as much as 33 cents in a week and could top $3 a gallon as soon as next week as the impact of an unexpected shutdown of a key unit at the region's biggest refinery shows up at the pump, motorist advocacy group AAA said Thursday.

While national prices for regular gasoline have been flat this week and prices in Texas have fallen nearly 5 cents, the average price at the pump in Ohio rose 33 cents and drivers in Illinois are paying nearly 19 cents more with most of the rise occurring Wednesday, AAA data shows.

The worst may not be over as oil traders struggle to bring supply to the region, which has been caught short of fuel after the unexpected shutdown of 60 percent of BP's Whiting, Indiana, refinery last weekend.

%VIRTUAL-pullquote-We expect to see higher prices in the next few days ... and they could reach $3 a gallon by next week.%It may take a month or longer to repair the 240,000-barrel-per-day crude distillation unit after leaks in its piping were discovered, sources said. The refinery accounts for over 6 percent of the Midwest's refining capacity.

"We expect to see higher prices in the next few days ... and they could reach $3 a gallon by next week," said Michael Green, manager at AAA public relations in Washington.

In addition to Illinois and Ohio, Green noted higher prices in Michigan and Indiana.

While lower than last month as well as prices above $3 a year ago, the spike at the end of the summer driving season will be an unwelcome surprise to region's motorists.

The Illinois average regular gasoline price was $2.78 a gallon, according to AAA's daily report Thursday, 13 cents lower than a month ago and 78 cents below last year.

"While that does soften the blow of the rising prices you can see how consumers, looking at how crude prices are dropping, feel frustrated at the higher prices for gasoline," Green said.

In the Chicago wholesale market Wednesday, regular gasoline jumped to 75 cents above the U.S. RBOB gasoline futures benchmark, the second-highest level in the past decade, according to Reuters data. That differential to the benchmark was at 2.50 cents below futures on Friday.

Chicago and metro area retail prices pushed above $3 on Wednesday.

BP's Whiting refinery, the nation's sixth-largest, can process over 19 million gallons of fuel a day, or enough to run 430,000 cars and 10,000 tractors, according to BP's website.
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