Maintenance, burst pipe causes of jump at the pump

A major pipeline in the U.S. and midwest market ruptured last week which is part of the blame for the rise in gas prices in the Queen City.

Prices across Regina were, on average, around 109.3 cents per litre. The lowest being 93.9 cents a litre and the highest hitting 116.9 cents a litre.

Senior Petroleum analyst with Gasbuddy.com, Dan McTeague, said the Explorer pipeline supplied around 15 per cent of the gasoline to the two major markets.

“About a week or so ago it ruptured, therefore it closed, creating a bit of a supply crunch,” he said.

McTeague added the burst pipe didn’t get a lot of attention in the media both here in Canada and in the United States, which is why it’s quite the sticker shock.

Along with the Explorer pipeline getting fixed, McTeague said a lot of the major refineries down south are conducting annual maintenance a bit later than usual.

“We’re not talking small (refineries) here,” he said. “It the case of Exxon Joliet refinery, (It’s) almost two-and-a-half times the size of the Co-op refinery we have in Regina, that has gone through maintenance as did two other refineries.”

He went on to say maintenance is a regular occurrence and most refineries use the “slow or lower demand” period to perform it. However, due to Hurricane Harvey in the south, he said many of the refineries pushed their upkeep work back by two to three weeks due to the storm.

“We were left with a dramatic increase of some 60 cents a gallon on the Chicago spot market for gasoline,” he said. “That translated into about a 13 cents a litre increase for gas stations — whole sale alone.”

He said that’s why motorists saw the jump at the pump.

However good news is on the horizon as McTeague said what goes up, must come down.

“One these things are resolved south of the border, we’ll likely see them drop down several cents a litre over the next seven to 10 days.”

—With files from Gormley