Gas prices across Michigan continued to climb into the weekend, hitting $4.88 a gallon for gasoline and setting a new record of $6.01 per gallon for diesel, the latter of which could have serious economic consequences.
“Michigan drivers are feeling the squeeze as gas prices spike,” Adrienne Woodland, a AAA spokeswoman, said Monday, May 4. “Until oil prices ease and gasoline stocks rebuild, drivers may continue to feel pressure from higher prices at the pump.”
Americans are increasingly feeling the pain of high prices at the pump, especially in a state tied to transportation. To fill a 15-gallon tank, Michigan motorists are now paying an average of about $73.
The average price in Michigan for regular unleaded on Monday was $4.86 a gallon, according to AAA, which tracks prices at about 4,200 stations, while diesel fuel — which set a new record on Sunday, May 3 — surpassed the previous record of $5.82 a gallon in 2020.
Spirit Airlines, which started as a Michigan trucking company in the 1960s, shut down over the weekend, as other airlines through the Association of Value Airlines also seek government help, asking for $2.5 billion to offset fuel costs.
Oil on Monday was trading at more than $100 a barrel.
Guiding ships through the Strait of Hormuz
Gas prices surged in March after Trump ordered strikes on Iran.
The conflict is now in its tenth week. On Sunday, May 3, President Donald Trump said the United States would try something new: Guide stranded ships out of the Strait of Hormuz, which Iran has effectively closed.
In his social media post, Trump dubbed the effort “Project Freedom” and identified it as a “humanitarian gesture.” He said it would begin Monday morning “Middle East time,” and noted that talks with Iran were ongoing and “could lead to something very positive for all.” Trump also added that interference with the effort would be “dealt with forcefully,” and offered few specifics on how the plan would work or how the ships would be assisted.
Reopening the waterway, through which about a fifth of the world’s oil travels through, is essential to solving the world energy crisis that is unfolding, experts have said. But even if the Strait of Hormuz is reopened, it could take months and potentially years to repair oil infrastructure damaged in the conflict.
It was unclear whether ships would be escorted or get information to help them navigate the strait, which reportedly has been mined, and opens ships to risk, not just in terms of lost cargo and lives, but also environmental damage.
A U.S. Central Command statement on social media said U.S. military support would include “guided-missile destroyers, over 100 land and sea-based aircraft, multi-domain unmanned platforms and 15,000 service members.”
And by late Sunday, it also was unclear whether Iran had forced a U.S. warship to turn back from entering the Strait of Hormuz. Iran’s navy said it had struck the ship, but a U.S. official denied the report. Reuters said it could not independently verify either claim.
Diesel fuel in Michigan hits record high
Gasoline prices in the Midwest last week surged past the national average, rising almost $1 per gallon, with regional refineries going offline. In Ohio, gasoline prices were so high, some wondered if they would surpass the all-time high of $5.07 a gallon set in 2022.
In Michigan, the record is $5.22 a gallon from 2022.
Throughout Michigan, the most expensive community averages for gas were in Benton Harbor at $4.94 a gallon; Ann Arbor, $4.92; and Grand Rapids, $4.91. The least expensive were Marquette at $4.65; Flint, $4.82, and metro Detroit, $4.83.
“Gasoline prices rose in every state over the last week, with some of the most significant and fastest increases concentrated in the Great Lakes,” Patrick De Haan, head of petroleum analysis at GasBuddy, said Monday, May 4. “At the same time, diesel prices surged to new records in parts of the region, with some areas touching the $6-per-gallon mark.”
Will Michigan gas prices go down soon?
There’s evidence, as statewide average prices fall and refineries restart, that prices will ease somewhat, but how much and how fast is difficult to predict, with most experts warning that drivers may have to wait months or a year for prices to return to $3 or less.
“While refinery outages were a key driver behind those outsized increases, early signs of improvement could help ease some of the most extreme price pressures in the Great Lakes in the days ahead,” De Haan said. “Beyond the region, markets are also digesting a wave of new developments — including OPEC+ raising production for June and President Trump outlining a plan to free stranded ships.”
It’s harder to calculate how much people are paying overall for record-high prices for diesel fuel, which is essential for trucking, and working its way into the price people are paying for other things, including food.
In mid-March, the Wall Street Journal reported in a piece headlined “$5 Diesel is Crushing Truckers. It Will Soon Be Felt Across the Economy.” It showed how the increased cost of transportation was making its way into the prices of what truckers were hauling.
And at the time, Federal Reserve Chair Jerome Powell said the price of diesel and other oil derivatives affect the cost of “many, many things” and that had effects on inflation that are “real, and they’re material.”
Nearly two months later, diesel in Michigan is now more than $6 a gallon.
Jet fuel prices now hurting airlines
High jet fuel prices were blamed for finishing off Spirit Airlines, which in recent years had been facing headwinds financially.
The company started as Clippert Trucking Company in 1964. In 1974, it become Ground Air Transfer and in the early 1980s, transformed into an airline.
Spirit initially was a Detroit-based charter operator, offering flights to Vegas, Atlantic City and the Bahamas, and in 1992, became Spirit, transforming into a Florida-based, no-frills flyer with bright-yellow plans and cheap flights to a variety of destinations.
Last year, Spirit was the second most used airline at Detroit Metro Airport, following Delta. It’s unclear how many of those flights other airlines might pick up or what will happen to its gates.
Spirit shut down after two bankruptcies and a failed intervention by the White House. The Trump administration signaled a $500 million plan could potentially bail out the airline, and Trump mused that the federal government should buy it.
On Saturday, May 2, U.S. Transportation Secretary Sean Duffy said the government was trying to help coordinate return flights for Spirit ticketholders, blaming the airline’s demise on what he termed the “radical policies” of former president Joe Biden.
Duffy, however, credited Trump with “taking care of you and your family when you fly.”
Fuel prices kill Spirit; other airlines at risk
It’s unclear how Spirit’s demise will affect other airlines, with some experts speculating that it could help them, but others wondering if — in addition to higher costs connected to fuel prices — ticket prices will rise.
High jet fuel prices are putting airlines, especially those offering low fares, in a precarious position. Several low cost airlines last week through a trade group asked the federal government last week for $2.5 billion to help survive as fuel costs soar and profits fall.
Duffy, however, said Saturday, May 2 he does not think that is necessary.
On CBS’s “Face the Nation,” Mike Wirth, the chairman and CEO of Chevron, warned that Middle East refiners are “significant exporters” of jet fuel and the conflict there is causing airlines to tighten their flight schedules.
Aviation, he said, is “going to probably get worse over the next few weeks.”
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com
This article originally appeared on Detroit Free Press: Michigan diesel hits record $6 a gallon as gas prices level off
Reporting by Frank Witsil, Detroit Free Press / Detroit Free Press
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