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Drivers may have to spend more for gas over the next two weeks following Texas blackout

This increase could lead to the highest prices since 2019 and the highest seasonal prices in over five years, GasBuddy reports.
Published: Feb. 17, 2021 at 3:35 PM CST|Updated: Feb. 17, 2021 at 10:21 PM CST
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MADISON, Wis. (WMTV) - Wisconsin drivers may have to fish more money out of their wallets for gas over the next two weeks, after oil refineries shut down in Texas.

Paying more at the pump is becoming less of a concern for Laurna Goshman.

“Gasoline has been all over the place. I don’t worry about it too much,” she said.

Goshman, Madison resident, said spending time on the road and more money goes hand in hand.  

“I think back to 2005 when I made a trip to southern Ontario,” she said.

She paid the pump a visit in the Midwest following Hurricane Katrina. The storm was a disaster that sent gas prices soaring.   

“I was paying 3.25 for gasoline at that point,” she said. “It crossed my mind right away when they said Houston was in a deep freeze.”

A similar situation unfolded after a cold snap in Texas.

“This super cold weather that is reaching far south into some of our energy infrastructure that we usually don’t see,” Andrew Stevens, UW-Madison applied economics assistant professor said.  

Texas is the countries’ largest crude oil producer.

“It’s things like the oil refineries in Texas, some of the transportation infrastructure across the middle of our country that has really ground things to a halt,” Stevens said.

The frigid weather froze oil production shutting down refineries. The closures could affect millions of oil barrels per day.  Each day that these refineries are not operating, the country is consuming more gasoline than it produces and that impacts the inventory.

“Less refined gasoline to go around and because of supply and demand, we’re seeing higher prices to help allocate that limited supply,” Stevens said.

Oil production decreased while gas prices increased, but Stevens said what goes up must come down.

“I do not expect this to be permanent,” he said.

This increase could lead to the highest prices since 2019 and the highest seasonal prices in over five years, GasBuddy reports.

GasBuddy notes that national average price of gasoline may jump 10 to 20 cents per gallon more than its current price of $2.54 per gallon. The travel and navigation app explained that at least a dozen refineries in the South have been impacted by the cold weather, with about 3.48 million of refining capacity lost every 24 hours.

Head of petroleum analysis at GasBuddy, Patrick De Haan, explained that the quicker refineries are able to come back online after these cold temperatures, the better for motorists.

“Oil prices have continued to rally as global oil demand recovers from the worst of the COVID-19 pandemic, and now the extreme cold weather shutting refineries down, us motorists just can’t seem to catch a break,” De Haan said. “We probably won’t see much, if any relief, anytime soon.”

De Haan also noted that states closer to these southern refineries, such as Texas, Alabama and Florida may be more affected by the increased gas prices than other states. However, other regions are still likely to see a shift in prices.

The company advised motorists to shop around for gas, drive mindfully and join gas station loyalty programs in order to save money.

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