The price of a gallon of gasoline in the United States rose sharply in the last two weeks amid outages at Midwest and West Coast refineries, according to a widely followed survey released on Sunday.
The average price of a gallon of gasoline rose 11.19 cents to $3.6566 per gallon on May 17, according to the Lundberg Survey of about 2,500 gas stations across the United States.
High gas prices in Minneapolis were the main driver of the overall increase, said Trilby Lundberg, the author of the survey. The city’s gas prices were the highest in the nation over the two-week period, rising 62 cents to $4.27 per gallon.
“In some markets hard hit with wholesale price hikes, retailers can’t take it anymore,” Lundberg said. “They will have to pass it on to consumers or risk business failure.”
The lowest prices were in Tucson, Ariz., at $3.18.
Refiners are also being hit by higher costs as they reformulate summer blend gasoline. Those not blending enough ethanol into gasoline have to buy so-called “RINS” or “renewable identification number” credits, which cost around 8 cents a gallon, Lundberg said.
A RIN credit offsets the lack of renewable fuel that a refiner uses in its gasoline blend.
Next weekend is Memorial Day weekend, which ushers in the summer driving months and peak demand for gasoline. While Memorial Day signals the beginning of summer driving season, and an increase in gasoline demand, there’s no threat of a supply shortage.
“It does tend to tighten the (supply/demand) balance, however, there is no shortage nationally, there are just some hot spots we’re talking about,” Lundberg said.