Why Illinois Gas Is Suddenly Among the Most Expensive Nationwide (Hint: the Problem Was Just Outside of Chicago)

Illinois has always had higher-than-average gas prices. But not this much higher.

This week, gas prices across the state skyrocketed to an average of $4.94/gallon for regular unleaded gasoline, currently outstripping the national average by $0.48/gallon and making Illinois the seventh-most expensive state to fill your tank (and the highest outside the West Coast).

And it's not just in Chicago, either. Sure, Cook County's average gas price is $5.15/gallon, but it's still expensive downstate: $4.92/gallon in Peoria, and $4.99/gallon in rural Hamilton County.

But this time, the war in Iran isn't the (only) culprit. In fact, something that happened right outside of Chicago is to blame.

Image source: Getty Images.

An outsized spike

There's no denying that the Iran war has been responsible for a major spike in U.S. gas prices, which have been high for the last two months, since the war began.

Gas prices across the U.S. have risen to near-record levels since the start of the war. A year ago, the national average price for a gallon of regular unleaded gasoline was $3.17/gallon. A month ago, that had shot up to $4.11/gallon. Today it's sitting at $4.46/gallon.

But until this week, Illinois drivers were only paying a slight premium to national prices. A month ago, Illinois' average regular unleaded gas price was just $4.29/gallon ($0.18/gallon above the national average). But today, it's $0.48/gallon more expensive. What happened?

A power outage happened, just outside of Chicago. But it happened at a very specific location.

A shutdown outside Chicago

The electrical outage occurred at BP's (NYSE: BP) largest gasoline refinery in the world: the Whiting Refinery in Whiting, Indiana, which is located just across the Indiana border from Chicago.

That's right: Chicagoland is home to the largest gasoline refinery in the U.S. outside of Texas and Louisiana, which produces about 16 million gallons of fuel per day, including diesel and jet fuel. Some of that fuel goes to BP-branded gas stations, but BP sells the rest to other customers across the Great Lakes region, including competing gas station brands. In fact, Whiting Refinery is by far the largest gasoline supplier to the Great Lakes region.

Image source: Getty Images.

So, when the Whiting Refinery isn't cranking out fuel, it's a big problem for drivers across Illinois. Wholesale gasoline prices spike across the region, and while it takes a bit of time for those elevated wholesale prices to trickle down to the retail level, they eventually do. That's what's happening now. The current shutdown began on April 26, and the high prices are expected to last until after it's back online. That could be any day, or it could be weeks from now.

How to proceed

Regional fluctuations in price due to supply and demand issues can occur when baseline prices are high just as easily as they can occur when baseline prices are low. Of course, we tend to notice the spike a lot more when prices are already high, possibly because we're more conscious of the price of gas in general.

Still, Illinois drivers may want to wait to fill up their gas tanks until the Whiting Refinery is up and running again, if possible. Gas prices are likely to ease slightly once the refinery's wholesale capacity has been restored.

Meanwhile, BP shareholders likely won't notice much of an impact. Products revenue and earnings might take a small hit due to the outage, but the last Whiting outage, in October 2025, resulted in a $100 million reduction in BP's Q4 products earnings before interest and taxes (EBIT), which came in at $1.4 billion. Considering that BP's companywide 2025 EBIT was $12.9 billion, that's not much of an impact at all.

John Bromels has positions in BP. The Motley Fool recommends BP. The Motley Fool has a disclosure policy.