Gas prices to increase as Texas refineries freeze

NOW: Gas prices to increase as Texas refineries freeze

MILWAUKEE (CBS 58) -- Texas' deep freeze has knocked out a big chunk of the U.S. gasoline supply chain.

Economists predict we'll see the impacts pretty quickly at the pump, perhaps 25 cents more per gallon over the next two weeks.

"This is like ridiculous, they're killing us, you know," said rideshare driver David Nagi.

He drives for a living and worries how higher pump prices will impact his earnings.

"We sit down at the airport two to three hours, we have to keep the engines running, I don't know what we can do about the gas prices, you know," said Nagi.

Gas Buddy's Patrick De Haan said Texas' deep freeze has literally frozen the refineries.

"Refineries are not built to the same standards as refineries in our neck of the woods are," said De Haan.

The cold snap has knocked out 20% of the U.S. oil refining capacity, and Wisconsin can't rely on refineries in Chicago or Superior to pick up the slack.

"We do get from these refineries too, but it's not enough, so to an extent we have to rely on the refineries from the south," said Marquette Economics Professor Abdur Chowdhury.

He expects gas prices to level off once Texas comes back online, but not to go down until late spring.

"Next month, the oil producing countries are supposed to meet and they're supposed to -- they have a plan to increase production," said Chowdhury.

UW Madison professor Andrew Stevens said COVID may actually help some people weather the increase.

"If you're not out on the roads all the time, maybe you can move around whose car you use to go run the errands," said Stevens.

But there's no way to escape the fundamentals of the oil market.

Gasoline is going to flow where the prices are high, and so just because we are close to refining capacity doesn't mean we are immune to some of the market forces," said Stevens.

Which leaves drivers like Nagi watching their earnings evaporate.

"Last week was like $2.19, but today was $2.59," said Nagi.

Gas prices have risen since December. Wisconsin averages nearly $2.50 a gallon, up from $2.25 a month ago.

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