While gasoline prices jumped 15 cents per gallon last week across Indiana, another small spike could hit the state and the Wabash Valley near the end of this week.
In Terre Haute, gas prices Monday ranged from $2.53 a gallon to $2.65.
"It could go up to $2.69 to $2.79 per gallon across in Indiana, and if [Indiana] gets a hike it would be later this week, maybe Thursday," said Patrick De Haan, head of petroleum analysis for GasBuddy, a Boston-based tech company that operates apps and websites based on real-time fuel prices at more than 150,000 gas stations throughout North America.
That price range, he said, "is pretty tight. Right now there is not a whole lot of deviation from that price range. Gas stations tend to huddle up because prices have been escalating so significantly the last couple of months. Gas stations really have no room to go low, and of course, nobody is going to go ultra high, as they are all keeping each other in check, essentially," he said.
Last week, extreme cold weather shut down a dozen refineries, of which 11 were in Texas, causing a shortage of fuel and increasing prices, De Haan said. "Those refineries account for close to 20% of all U.S. refining capacity. That drove up prices," he said.
However, prices remained steady as demand was down last week while most of the county's road travel was impacted by winter storms. Retail gasoline demand in Mississippi, Arkansas, Alabama, Louisiana, Texas and New Mexico dropped 39% last week, De Haan said.
But prices could bump up again soon "as we are starting to see more demand," De Haan said, especially as many larger cities slowly open up their economies during the COVID-19 pandemic.
"Chicago, for example, is now up to 40% back open, so America is reopening and people will start to have places to go," he said. And as colder weather conditions begin to warm, "I think demand will come roaring back this week."
And gasoline prices will likely not see much of a downturn any time soon as refineries in about a month start to transition away from heating oil to blended gasolines, De Haan said.
Terre Haute and Indiana, along with the Great Lakes area, are in a region where prices generally go through cycles, De Haan said.
"Prices in Terre Haute and across Indiana engage in price cycling," De Haan said. "Everyone goes up at the same time, then they chisel away and lower prices a few cents a day for five to seven days, then prices jump back up," he said. "That is a process that repeats itself every five to 10 days in the spring and summer and repeats itself every seven to 12 days in fall and winter. And that varies as it is driven by the wholesale [gasoline] market.
"That is why every station goes up to the same price. Generally the market in Terre Haute and Indiana is driven by Speedway. They are very price aggressive. They will undercut their competitors until they can't afford it, then they raise their prices and everyone follows," De Haan said.
Speedway has more market share in the Great Lakes area, such as Michigan, Indiana, Ohio and some parts of Illinois.
"It is in very select markets," De Haan said of price cycling. "The Federal Trade Commission has done studies on price cycling. It does save motorists money. No where else in the country do you get the opportunity to fill up when a gas station is basically selling at cost. But it is all about timing your purchases. In the seconds before prices go up, stations are basically selling at or below cost, then prices go up and they make 15 or 20 cents a gallon."