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Gas prices reach new record in six states

Gas prices surge above their 2008 highs in four Midwest states, West Virginia, and Hawaii. Supply disruptions and seasonal factors are behind the region's abnormally high gas prices.

By Business editor / May 4, 2011

In this April 20, 2011, file photo, gas prices are seen on a sign at a gas station in Washington, D.C. Fuel prices have reached all-time highs in six states, mostly located in the Midwest.

Susan Walsh/AP/File

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Gas prices have gotten so high that in six states they've reached a new record above the levels set in 2008.

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Prices in West Virginia inched above their 2008 record today, with the average price for a gallon of regular gasoline edging above $4.15, according to AAA's Daily Fuel Gauge Report. Four Great Lakes states – Illinois, Indiana, Michigan, and Ohio – topped their 2008 records yesterday. Hawaii first exceeded its all-time high April 20.

Two other Great Lakes states – Minnesota and Wisconsin – are within an eyelash of beating their 2008 records.

The rise in prices nationally, of course, has been instability in the Middle East. But the Midwest's rise has been caused by a confluence of events closer to home over the past week: production problems at two midwestern refineries; tornado-driven power outages at seven refineries in Texas, Alabama, and Pennsylvania; flooding along the Mississippi River and elsewhere that has kept barges from reaching the upper Midwest; and the seasonal switchover from winter-blend to summer-blend fuels.

"This is the perfect storm," says Avery Ash, AAA's Washington-based manager of regulatory affairs. "These factors on their own would have created slight price increases."

Average gas prices in these states are all above $4 a gallon, with the exception of Minnesota, according to the AAA report. The averages range from Hawaii's $4.56 a gallon, the highest in the nation, and No. 2 Illinois at $4.31, to Minnesota at $3.95 a gallon. In one remote town in the Hawaiian island of Maui, prices now top $6 a gallon.

The national average as of May 4, 2011, was $3.98 a gallon, more than a dime away from its all-time high of $4.11 set back in July 2008.

In the very short term, gasoline prices could rise nationally. "I'm pretty sure that we're going to go over $4 when the [federal gasoline] report comes out on Monday," says Brian Milne, US-based refined fuels editor for Telvent, a global IT solutions and business information services provider headquartered in Madrid. "Then, we'll start seeing prices steady" and then start to fall.

Regionally, however, drivers in the upper Midwest and West Virginia should see those record gasoline prices decline as the supply situation slowly returns to normal. "We would expect them to ease," says Mr. Ash of AAA.

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