Why does Michigan have high gas prices compared to other states?

Posted at 12:48 PM, Jun 09, 2022
and last updated 2022-06-09 18:26:16-04

(WXYZ) — There are only nine other states in this country with higher gas prices than Michigan. Experts say there are many contributing factors, but the main reason: supply and demand. So prices may continue to creep up, the more we fill up.

"Our Meals on Wheels is really hurting," Steve Haveraneck with Oakland Meals on Wheels said.

From 5 a.m. to 2 p.m. every weekday, Oakland Meals on Wheels delivers 1,000 meals to struggling seniors.

For Haveraneck, it’s not just a business, it’s a lifeline for the city's most vulnerable. But right now, his company is in need of salvation.

Haveraneck says Meals on Wheels gets its budget bid approved every three years, and in 2019, gas prices were around $2.50. Today we’re paying double that at the pump and those high gas costs are now cutting into production.

"We will be waitlisted by the fall for sure," he said.

And that’s the best case scenario, the worst?

"We’re not here," Haveraneck said.

According to GasBuddy, Americans are spending $700 million more on gas every day than we did a year ago. The hurt is felt more in Michigan with our state experiencing the largest increase in prices over the last week.

The 45 cents surge bumped us into the country's top ten list for high gas prices, but why?

"It’s a bit of a puzzle why we are a little bit higher than our neighboring states," Daniil Manaenkov, economic forecaster at the University of Michigan said.

Manaenkov said there are a myriad of factors contributing to gas prices like the price of natural gas, crude oil and local refineries. But much of it boils down to supply and demand.

“I think we’re driving a lot," Manaenkov said.

During the summer, people in the Motor City state like to drive.

"Certainly the trends that we've been tracking in terms of the volume of traffic that is on the road has certainly skyrocketed,” said Howard Hugley, a spokesperson for AAA.

He said peaks are especially seen during holidays like Memorial Day and Independence Day. But, it’s not just road travel that’s driving up costs.

"It’s possible that the cancellation of flights to northern Michigan and Grand Rapids is making people drive more," Hugley said.

Unique to Michigan, Manaenkov says people who usually take flights out of Traverse City and other small towns are now having to drive down to Romulus. He also says at least for the summer, the high prices are likely here to stay.

"If the economy keeps going strong, I do not expect prices to come down significantly," said Manaenkov.

Difficult news for Oakland Meals on Wheels, which is also seeing a drop off in volunteers who drive because of the surge.

"What happens if we go away? What happens if we stop? I don’t know but it really, really scares me," Haveraneck said.

Experts say the gas prices this summer are likely here to stay but there are ways to save money at the pump. Check them out here.