The average cost of gasoline in Michigan has hit $3.95 as some parts of the state edge even closer to $4 a gallon, according to an analysis released Monday by AAA-Michigan. That is an increase of 33 cents from last week and also an increase of more than a dollar a gallon from where it was a month ago.
"Pump prices across Michigan have jumped rapidly with drivers paying the highest prices since the summer of 2023," said Adrienne Woodland with AAA-Michigan, noting this mirrors what is happening to fuel costs across the country.
The spike in the price of gas coincides with the ramping up of hostilities between the U.S. and Iran, but there are other factors in play, particularly the transition from cold-weather to warm-weather fuel blends.
Woodland said that transition was starting at roughly the same time the U.S. and Israel launched the first strikes against Iran.
“Prices had already started to increase in early March because gasoline refineries were starting to switch over from the winter blend of gasoline to the summer blend,” she told Michigan Public Radio. “The state average as of March 2 was about $2.99 a gallon. I think that was up about 14 cents from the previous week. A lot of that was due to the switchover.”
That left smaller stockpiles of fuel available for gas stations, which helped drive up the cost at the pump.
“Add on top of that, the conflict causes crude oil prices to raise drastically and that drastic of an increase, of course, is showing up in what we pay at the pump,” she said.
The cost of filling up at the gas station is just one of the effects of the U.S. conflict with Iran, said economist Charles Ballard. He said lots of products and services are affected by the price of crude oil.
“The prices for all sorts of things are going up,” he said. “Fertilizer is a petrochemical product. Price of fertilizer is way up just at planting season. Jet fuel, of course, is up so airline prices are up. Plastics are made using oil.”
Ballard said there are parts of the state where people use oil for home heating and those households are feeling the pinch.
“The bills for home heating oil here at the end of the winter have skyrocketed because heating oil is way up,” he said.
Ballard said the U.S. economy is already shaky as evidenced by a series of weak jobs reports. Also, he said, even if this turns out to be a short war, damage to oil infrastructure in the Persian Gulf region means a bottleneck in producing and shipping crude oil will linger after the fighting ends.
