A fire and explosion at an oil refinery near Toledo on Tuesday killed two people and forced the shutdown of a BP facility, raising additional concerns about how it will affect Midwest gasoline supplies and prices at the pump, which have been in decline for most of the summer.
In one day, AAA spokeswoman Adrienne Woodland told the Free Press, the average price of regular unleaded gas in Michigan rose 5 cents to $3.85 a gallon as a result of the outage, according to the Motor Club’s National Analyst. AAA tracks prices nationwide.
It is not clear how long the high prices will continue.
But analysts at AAA predicted the Ohio refinery shutdown could continue for two weeks.
The Husky Toledo refinery, one of about 130 in the United States, is unlikely to have a major impact on the nation’s average gas price, which fell to $3.64 on Monday for the 14th consecutive week and the longest decline since 2015, according to gasoline price tracker GasBuddy.
Last month, an electrical fire shut down BP’s Whiting refinery in Indiana for weeks, prompting federal officials to issue emergency fuel waivers to help alleviate fuel shortages in Michigan and three nearby states: Illinois, Indiana and Wisconsin. The waiver suspends federal regulations and federally enforceable state implementation plan requirements for fuel volatility.
The Indiana refinery processes about 435,000 barrels a day and has been blamed for some of the recent gas price fluctuations across Michigan, but it restarted in late August.
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According to BP’s website, the Husky Toledo refinery in Oregon, Ohio — the oil company agreed to sell a half-interest last month — can process 160,000 barrels of crude oil a day “providing the Midwest with gasoline, diesel, jet. fuel, propane, asphalt and other products.”
Witnesses described the explosion in news reports and posted videos of thick plumes of smoke rising into the air. The fire broke out Tuesday night, BP spokeswoman Megan Baldino said in a statement. The company did not say how the fire started or the extent of the damage.
According to Baldino, two were injured, all other personnel were accounted for and the plant was safely shut down.
BP Husky announced that it will cede the state’s 50% stake in the Toledo refinery to its joint venture partner Cenovus Energy for $300 million.
But even before the fire, GasBuddy’s head of petroleum analysis Patrick DeHaan warned Monday, “The downward trend could change this week, especially as the transition to winter gasoline begins in the Great Lakes states.” Winter gas formulations differ from summer to account for lower temperatures.
De Haan, who was out of the office on Wednesday, said earlier that the downward trend in prices may be coming to an end.
The Associated Press contributed. Contact Frank Witsil at: 313-222-5022 or [email protected]