(The Center Square) – Following a power outage that took an entire fuel refinery offline last weekend, filings with regulatory agencies reveal that additional problems at the plant with flood water have kept the facility from operating, creating the potential for Midwestern fuel prices to continue rising.
According to filings with environmental regulators, the Exxon Mobil refinery in Joliet, which has the capacity to produce 275,000 barrels per day, has remained offline through Thursday.
Patrick De Haan, senior petroleum analyst with GasBuddy, told The Center Square this week that officials thought the plant would likely be fully online near the end of the week.
“This refinery I believe has a capacity of nearly 8% of the total refining capacity in the region. So it's a fairly large contributor that has a capacity to produce and refine over 10 million gallons of fuel every day,” De Haan said. “So while this restart process takes time, this refinery has not been able to meaningfully contribute refined product to the market.”
De Haan previously spoke to reports that another major regional refinery, the BP plant in Whiting, Indiana, was undergoing maintenance, to which he said the reports were likely misguided.
“There was some chatter from market sources about potential maintenance. But I was able to learn that that maintenance was in late August on a portion of a unit that does not have a significant impact on production,” De Haan said.
New reports, which De Haan has addressed, suggest there have been some slowdowns at the BP plant later into the week, which he said in an X post was likely tied to maintenance.
Compounded with geopolitical conflict in both the Middle East and between Russia and Ukraine, the refinery slowdowns in the midwest have driven fuel prices up significantly across the Midwest.
Friday’s national average price for a gallon of regular gasoline was $4.47, while diesel reached a new all time high nationally of $6.45.
In Illinois, regular was $4.85 on average, while diesel was $6.50. Similarly, Michigan saw regular prices at $4.89 and diesel at $6.68. Both states, and others with relatively lower prices, saw major shocks to the price of diesel week-over-week.
Michigan experienced a 66-cent increase, followed by Indiana with a 52-cent increase, then Illinois with 47 cents, and Wisconsin with 35 cents.
De Haan said that fuel prices would likely remain higher if foreign conflicts continue escalating, and the price of regular and diesel fuels would likely come down slightly in the region with a lag behind refinery capacity coming online.
“Whether prices go up or down is really just going to be a function in the weeks ahead on whether there's escalation which would drive prices up by changing the risk calculus and making it more difficult for oil to flow,” De Haan said.
