Gas will remain expensive in mid-Michigan this week.
But it could be worse. You could be in Canada.
So says Zachary Cohle, a professor of economics at Saginaw Valley State University. And it’s not a coincidence.
After the war with Iran started, “Canada saw a higher increase in their gas prices than the United States, partly because the United States is gas heavy,” Cohle explained. So Michigan started “sending their gas over to Canada because they can make more money that way.”
Added Cohle, “One of the best things about the Michigan economy is that we're able to trade with Canada, and we're able to get all these goods and inputs for our devices and we can sell them all of our goods.”
But there’s a downside.
“That's actually really killing us here because we are seeing higher prices than almost every other state outside, say, California, because we are so close to Canada and producers are trying to chase that dollar and sell where the market is better.”
Indeed, regular gas at the pump in Toronto was $6.85 CAD per U.S. gallon and expected to go up.
Scheduled and unscheduled maintenance at refineries in the Midwest is also contributing to higher pump prices here, Cohle said.
But Canada is “absolutely” the biggest reason Michiganders are paying more, he said.
If there is good news, Cohle thinks prices have hit their apex. They reached $4.99 in the Lansing area Thursday.
But, he added, pointing to the uncertainty in the Middle East, “I can't see gas prices going down to reasonable levels for at least the next couple of months.”