By Shariq Khan and Rahul Paswan
(Reuters) -The U.S. Environmental Protection Agency (EPA) issued an emergency waiver on Thursday to help ease fuel shortages in four Midwestern states where gasoline supplies have been affected by the closure of a refinery in Joliet, Illinois.
ExxonMobil (NYSE:) has closed its 251,800 barrel-per-day Joliet refinery due to a power outage following a July 15 storm. Although power was restored to the refinery on July 24, the refinery will likely not be operational again until mid-August. , industry monitor IIR Energy said on Thursday.
The EPA’s waiver, which applies to Michigan, Wisconsin, Indiana and Illinois, suspends federal anti-smog rules that require the sale of less volatile but more expensive gasoline in the summer. The agency often issues such waivers to places affected by unforeseen supply disruptions.
The waiver is valid through August 20, the EPA said. It comes in response to requests from governors of the four states.
Gasoline prices have soared in the Midwest due to the Joliet refinery outage. Average retail prices in Illinois have risen nearly 18 cents to more than $4 per gallon since the Joliet outage, according to data from tracker GasBuddy.com.
Prices in Michigan rose 15 cents and in Wisconsin 14 cents, the data showed, even as the national average price fell marginally over the same period.
Prices should fall in the coming days as a result of the exemption, says GasBuddy analyst Patrick De Haan. Because the waiver allows Midwest suppliers to use more volatile fuel, it should increase the supply of gasoline available to them, De Haan said.
“This should certainly alleviate some of the price pressure,” he said. “Until August 20, they can use just about any type of gasoline they can get their hands on,” he said.
Gasoline inventories in the U.S. Midwest fell 2.3 million barrels over the past two weeks to 45.81 million barrels on July 26, the lowest level since November, according to data from the U.S. Energy Information Administration.
