GasBuddy Talks Indiana's Gas Tax Holiday, Possible Future...

GasBuddy Talks Indiana’s Gas Tax Holiday, Possible Future Increases

STATEWIDE–Gas prices have dropped recently in Indiana, but GasBuddy’s Head of Petroleum Analysis Patrick DeHaan is warning about future increases that could come this week.

He says he’s been hearing about issues at refineries both in Indiana and other states in the Midwest and that hasn’t helped things.

“Refineries are very tight lipped about their operations because generally speaking, when their units go down, they themselves have to buy gasoline at a large premium to meet contracts and obligations. So refineries do not give details on exactly what happens. But we generally can see when problems exist through trade sources and through how the wholesale markets react. And right now, it would appear very likely that a diesel producing unit at one of the larger refineries in the region, as well as a high octane and alkalite producing unit at a refinery may be impacted. And that’s just because the price of premium gasoline and diesel has jumped considerably over the last several trading sessions. So we don’t know what is wrong. Occasionally, filings may provide some insight, but we could see prices jumping up here at some point this week if these refinery prices persist or if these refinery issues persist, coupled with the fact that oil prices are going back up again after the weekend led to disappointing progress between the U.S. and Iran, with President Trump calling Iran’s proposal totally unacceptable. That is pushing oil prices back up to start the week,” said DeHaan.

DeHaan says the gas tax holiday imposed by Indiana Governor Mike Braun is showing benefits to people who fill up.

“I found a couple of stations in northwestern Indiana that were below the $4 gal mark, thanks to that gas tax holiday. Certainly a savings of nearly a dollar a gallon from some of the stations in both Michigan and Illinois. So certainly a good time to be a Hoosier, but shop around because prices can vary 30, 40, even 50 cents as some retailers are passing along the sales tax savings faster than others,” said DeHaan.

Diesel prices have been trending up with regular unleaded gasoline prices headed downward lately.

“Well, right now, looking at diesel across the state, the average price has now started to go back up. We’re at $5.98. That was $5.96 to start the weekend. So seeing an increase in the diesel price as gasoline prices have plummeted from $4.86 a gallon a little over a week ago to $4.36 a gallon today. So diesel moving up, gasoline moving down again has more to do with specific units at refineries now that are impacting diesel production more than gasoline,” said DeHaan.

The war in Iran is also still playing a factor.

“Well, as long as the Strait of Hormuz continues to be closed, the amount of oil flowing into the global market is greatly reduced. And that is continuing to actively push prices up, maybe not necessarily on a daily or even weekly basis, but the longer the Strait remains closed, the less global supply there is,” said DeHaan.