The cost of gas spiked in Iowa last week. An analyst says prices should start dropping soon.

Wholesale gasoline prices in the Midwest are starting to stabilize and relief at gas pumps in Iowa should soon follow, says Patrick De Haan, an analyst with gas price website GasBuddy.

De Haan said gasoline prices in Des Moines started dropping slightly on Monday, falling about two-tenths of a cent between midnight and noon.

“Only two-tenths of a penny, not much to get excited about, but the signal is undeniable, that recovery is starting,” he said.

Prices at the pump will fall as the wholesale price goes down, but may lag, with some variability from gas station to gas station, he said.

Republicans blame Biden policies for higher prices

Why the sudden jump in prices near the end of summer, when they usually fall? U.S. Sen. Chuck Grassley, an Iowa Republican, in a tweet Sunday said President Joe Biden is responsible.

“Pres Biden’s boneheaded energy policies are to blame,” Grassley wrote, pointing to Biden’s recent cancellation of oil and gas leases in the Alaska National Wildlife Refuge granted during the Trump administration. “Unlike Trump whose policies made us energy independent Biden policies make USA energy dependent = not good for natl security or ur pocketbook.”

Grassley’s fellow Iowa GOP U.S. Sen. Joni Ernst and U.S. Rep. Ashley Hinson, a Republican representing northeastern Iowa, posted similar tweets. Democrats, meanwhile, cited reports that gas prices could rise as Russia and Saudi Arabia announced new production cuts.

Analyst: Refinery disruptions the real cause

De Haan, however, said interruptions of production at Midwest refineries are the culprit, pointing to recent problems at facilities in Oklahoma and Minnesota and near Chicago. According to AAA Fuel Gauge, the price spikes to $3.90 or more a gallon primarily affected the West and parts of the Midwest, while most of the rest of the nation saw only marginal increases or even declines.

In fact, the website showed the week-over-week increase in Iowa ― which often has some of the nation’s lowest gas prices ― as being among the largest: almost 40 cents a gallon. Iowa ranked fourth for the highest average gas price ― $3.94 a gallon ― among the dozen Midwestern states, trailing North Dakota ($4.01), Minnesota ($3.99) and Illinois ($3.98).

Top of the charts was California, at $5.44, but that was only about 8 cents more than in the previous week. Want the lowest possible price? Look to Mississippi, at $3.26, down 3 cents from a week ago.

“These issues aren’t affecting everyone at the same time. It’s not about oil production because it’s an issue that’s impacting just a few states. It’s about refineries being out. And these issues have happened before in the past in other regions,” De Haan said.

“We can have all the crude oil in the world but without refineries, there won’t be a single drop of gas produced,” he added.

Flood of gas coming?

Refineries often have contracts to supply finished gasoline products to stations, and when they are not able to because of maintenance issues, they are forced to buy gasoline from other parts of the country in order to fulfill their obligations.

“Essentially, prices went up because there was not enough supply. So if a refinery got really desperate and raised the amount of money it was willing to pay to another refinery to source gasoline, that unfortunately pushes the entire market up,” De Haan said.

But that high price ultimately will bring a flood of gas to Iowa, pushing prices back down, he said.

“When prices skyrocket so much in Iowa, refineries that have access to the Iowa market by pipeline or trucks throw as much gasoline at that market as they can because who wouldn’t want to sell into a market that is 75 cents above every other market in the United States?” he said.

In addition, Friday is when refineries will switch over to producing the less-expensive winter blend of gasoline, formulated to help vehicles start better in the cold.

“By the time we switch to winter blend on Friday, the wholesale market should very quickly stabilize,” De Haan said.

How to tell what’s behind price increases

He said there’s a simple trick for anyone wanting to diagnose the cause of a gas price spike.

“What Americans need to do if they want to be factually correct on why gas prices suddenly exploded is look at the price of oil over last week,” he said. “It rose slightly, about 2%, but for the price of gasoline to skyrocket over 10%, that has to tell you something is disconnected here. And what has been disconnected here is the refining situation.”

De Haan said last week’s announcement about oil and gas leases in Alaska had “zero effect.”

“An area of the country that’s never produced crude oil not being able to produce crude oil is irrelevant. It’s kind of like saying your commute time went up because a highway that was never built but was proposed is now adding 30 minutes to your commute time,” he said.