Pipeline leak causes higher gas prices

September 14, 2010 at 12:00a.m.

Associated Press

NEW YORK

Retail gasoline prices increased Monday as crews continued to work on a broken Midwest pipeline that transports a quarter of the oil imported from Canada to the U.S.

In its weekly report on gasoline pump prices, the Energy Department’s Energy Information Administration said Monday that the national average for a gallon of unleaded regular was $2.721, up about 4 cents from a week ago. The Midwest showed the biggest jump in regional prices, up 10.4 cents from a week ago to $2.778 a gallon. The average pump price in Chicago was $3.018, up almost 16 cents from a week ago.

In Ohio, the average price for a gallon of unleaded regular gas jumped from $2.70 to $2.79 as of Monday morning, according to AAA’s Daily Fuel Gauge Report.

The broken Enbridge Energy crude-oil pipeline is in Romeoville, Ill., about 30 miles from Chicago. It is part of a system that transports oil from western Canada to U.S. refiners. Marathon Oil Corp., which operates a refinery in Robinson, Ill., about 225 miles south of Chicago, would not comment on whether it faced shortages because of the pipeline shutdown. On its website, Marathon says the refinery produces gasoline and diesel fuel. It has a capacity of 206,000 barrels per day.

Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said the pipeline helped push wholesale gas prices in the Midwest about 30 cents per gallon higher than the West Coast and 15 to 20 cents per gallon higher than the East Coast.

The jump in prices is “based mostly on perception,” Kloza said, as the U.S. continues to sit on the largest supply of oil and petroleum-based fuels on record. Fuel supplies may be tighter in the Midwest as farmers harvest crops and push diesel demand higher, but refineries are still receiving oil despite the pipeline problem, he said.