Gas prices decline, but refinery explosion could drive them up

THE AVERAGE price of regular gas in Rhode Island declined 5 cents this week to $2.67 per gallon. / BLOOMBERG FILE PHOTO/AKOS STILLER
THE AVERAGE price of regular gas in Rhode Island declined 5 cents this week to $2.67 per gallon. / BLOOMBERG FILE PHOTO/AKOS STILLER

PROVIDENCE – The average price of self-serve, regular unleaded gasoline in Rhode Island declined 5 cents this week to $2.67 per gallon, 1 cent higher than the national average and 28 cents lower than prices at this time last year, according to AAA Northeast Monday.

Prices in the area ranged 36 cents, from $2.53 to $2.89 per gallon.

  • Midgrade gas averaged $2.94 per gallon, ranging from $2.85 to $3.05 per gallon.
  • Premium gas averaged $3.14, ranging from $3.05 to $3,25 per gallon.
  • Diesel fuel averaged $3.01 per gallon, ranging from $2.81 to $3.27 per gallon.

Despite the drop in prices this week, oil futures jumped 3.9%, the most in more than three months, after an explosion and fire Friday at the Philadelphia Energy Solutions oil refinery, the largest refinery on the East Coast. Pump prices are likely to rise as the surge filters down to retail stations, reversing a more than 20-cent drop from early May.

The blast was so large and so hot that it was captured from space in satellite infrared images, the National Weather Service’s Key West office wrote on Twitter.

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The incident could shut in about 4.2 million gallons a day of supply, enough to meet about 2.7% of East Coast demand, according to Bloomberg News estimates. To fill the gap, prices would have to increase high enough to attract more supply from Europe or other parts of the U.S.

The fuel shortfall could be made up with inventory draws from the local region in the near term and from imports over the longer term, according to Andy Lipow, president of Lipow Oil Associates in Houston.

In Massachusetts, the average price of regular gas declined 3 cents this week to $2.64 per gallon, 2 cents lower than the national average and 23 cents lower than prices at this time last year.

Prices in the Bay State ranged 63 cents from $2.42 to $3.05 per gallon.

  • Midgrade gas averaged $2.88 per gallon in Massachusetts, ranging from $2.67 to $3.25 per gallon.
  • Premium gas averaged $3.07 this week, ranging from $2.89 to $3.45 per gallon.
  • Diesel fuel averaged $2.99 per gallon, ranging from $2.73 to $3.39 per gallon.

David Marino and Barbara Powell are reporters for Bloomberg News. PBN contributed to this article.