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updated: 8/1/2012 6:58 PM

Refinery issues, oil spill aid late July fuel spike

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  • Fuel costs dipped in July compared to 2011 levels, but the cost per gallon rose at the end of the month.

      Fuel costs dipped in July compared to 2011 levels, but the cost per gallon rose at the end of the month.
    Associated Press

 
 

Stomach-churning, highs and lows, instability. No, not the roller coaster ride at a county fair last month, but rather the painfully volatile cost of gas.

Illinois actually had a relatively good month in July, AAA reported Tuesday, with the cost of a gallon of regular gas averaging $3.60, a dip of 8 cents from June. And if you compare $3.60 with $3.87 a gallon in July of 2011, it's definite relief.

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But don't rush to fill up the SUV yet. Toward the end of July, gas started to spike in Chicago and the suburbs. In the metropolitan region, a gallon of regular cost $3.93 Tuesday compared to $3.87 Monday on average, AAA reported. It was $3.75 a week ago.

The jump results from production problems at the BP oil refinery in Whiting, Ind., and Citgo refinery in Lemont, AAA public affairs director Beth Mosher said. Another contributing factor is an oil pipeline rupture last week in central Wisconsin, south of Madison. The federal government on Tuesday refused to allow Enbridge Energy Partners to reopen the pipe, which carries crude oil to Chicago refineries, until the company has come up with an acceptable leak-prevention plan. Enbridge was chastised by the National Transportation Safety Board in July for safety breeches that resulted in a pipeline spill near the Kalamazoo River in Marshall, Mich., in 2010.

Illinois joins Hawaii, Alaska, Connecticut, California and New York as the top six states for high gas prices.

The pricing got to driver Jeffrey Issel of Mundelein, who paid $3.89 a gallon on his last visit to the pump.

"I'm afraid to fill up. Can someone, anyone, please explain to me why we are paying the same for gasoline today when oil is trading at less than $90 per barrel as we were when oil was trading at $130 a barrel?" he emailed the Daily Herald.

Mosher responded that "you can't ever look at gas prices in a single moment in time and say, 'We paid this here and gas was this price then,' and expect things to line up.

"You have to take in account supply and demand, production and distribution. If you look at what's happening today, the Great Lakes states are greatly affected by the leak in the pipeline and the production issues at the two local refineries."

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