Going up!
Gas prices threaten fall color season
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HOUGHTON -- The recent spike in fuel prices is creating widespread economic uncertainty across the western Upper Peninsula, threatening to impact regional tourism revenues on the threshold of the autumn color season.
Gasoline prices in Michigan jumped 62 cents per gallon in a single week, hitting a 2026 high of $4.93 for regular unleaded, AAA-The Auto Group announced Monday morning. The sudden surge leaves state motorists paying an average of $74 to fill a standard 15-gallon tank--an increase of $1.75 per gallon compared to the same period last year.
Visit Keweenaw Executive Director Brad Barnett said the surge in already high fuel prices may have a negative impact on the fall tourist season which, he remarked, is the busiest portion of the tourism season. Ninety-five percent of visitors travel to the Keweenaw by automobile.
"Anytime we have an increase in fuel prices, both gasoline and diesel fuel, that's going to impact people's ability to get here, just from a pricing perspective," said Barnett. "So, it is challenging, especially for those pulling a fifth wheel behind them and they're driving a diesel truck, and their intent is to drive a side-by-side once they get up here, the fuel costs start to stack up."
WKYC television, in Cleveland, reported Monday that crude oil prices surged back up toward $100 per barrel due to expanding military escalations between the U.S. and Iran, combined with fresh Houthi rebel drone attacks shutting down major oil pipelines and transit hubs in the Middle East. Global diesel and refined gasoline supplies were already tight worldwide from months of continuous strikes on Russian oil refineries.
On September 17, Reuters reported Exxon's 11 million-gallon refinery in Joliet, Illinois was forced offline after a power outage triggered the facility's safety flare. Yahoo Finance reported while electrical crews managed to fully restore power to the site, a secondary crisis struck: heavy floodwater completely overwhelmed a critical industrial pump, forcing the massive 275,000-barrel-per-day facility to stay entirely offline while cleanup crews deployed emergency containment booms. Because a total refinery shutdown destabilizes complex crude processing units, engineers cannot simply flip a switch to resume production, resulting in an extended shutdown that severed 11 million gallons of daily fuel from the Midwest market.
Barnett said gas pricing is complex and there are a lot of reasons fuel prices are increasing. Where fuel is refined can also have an impact. While he cannot predict fuel prices increasing or decreasing, because the Keweenaw is a "drive market," high prices will disproportionately impact the season.
"Ten cents a gallon doesn't make a difference," Barnett said, "but when consumers see gas prices hit the extra dollar mark, whether it's three, four, or five dollars, those are all the psychological tells that when people start to change their behavior, so it's not about five cents in one direction or the other, it's going to be about 'are we cresting those thresholds?'"
However, Barnett noted that the unique demographics of the Upper Peninsula’s autumn color season could provide a natural economic buffer, as fall visitors tend to be fewer young families and more individuals advanced in their careers or retired.
"If you're the glass is half full kind of guy, in tourism, we lean that way," Barnett said. "We would say if the stock market's still strong and people are using their 401(k)s in terms of their primary income, that market is still doing really well, and so we would still be in a position for a strong, full season. So it’s going to be a trade-off between those two sources."