Flooding From Harvey Causes Indiana Gas Price Spike

Sep 1, 2017

Credit Brian Herzog / https://www.flickr.com/photos/herzogbr/

Hurricane Harvey has shut down oil refineries at the Gulf of Mexico that account for 20-percent of the nation’s total gasoline supply -- and that's forcing Indiana drivers to pay more at the pump.

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,” he says. “But, there have been some things discovered that are going to slow the process of coming back up.”

Tyner says he expects gas prices to stay higher than $2.50 a gallon, and says Hoosiers shouldn’t expect to see a decline for at least another two weeks.

Tyner predicts the spike will push prices up more than a quarter a gallon. And he says prices won’t decline until refineries and pipelines – which were also shut down – are operational again.

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.”

According to GasBuddy.com, the state average, as of Friday morning, was $2.53 per gallon.