Higher Energy Costs Forecasted For Summer 2026

(Source: MIRS.news, Published 05/21/2026) Rising gasoline and diesel prices tied to geopolitical tensions in the Middle East and continued instability from the war in Ukraine are expected to push Michigan energy costs higher this summer, according to the Michigan Public Service Commission’s 2026 Summer Energy Appraisal.

The annual report found the closure of the Strait of Hormuz and ongoing tensions in the Middle East have significantly disrupted global petroleum markets, contributing to a 51% increase in gasoline prices since 2025. National gasoline inventories were reported 4.7% below the five-year average, while Midwest inventories were down 2.8 million barrels compared to a year ago.

Crude oil prices climbed to $113 per barrel following the Strait closure, according to the report, although U.S. crude stockpiles remained 2.5% above 2025 levels.

Diesel fuel prices saw some of the sharpest increases. As of May 15, average diesel prices hit a record $6.20 per gallon, roughly $2.70 higher than last year. The summer average is projected to settle around $4.76 per gallon.

Electricity prices also continue trending upward. The report said average electric rates rose 4.6% between 2025 and 2026, with Michigan electricity prices remaining above the national average. The appraisal comes amid continued debate over utility rate increases approved by the MPSC for major utilities like DTE Energy and Consumers Energy.

Despite higher electric prices, the report projected no major electricity supply shortages this summer. Demand for electricity is expected to remain stable, while natural gas demand is projected to rise 6.5% in 2026.

Natural gas commodity prices, however, are expected to decline slightly. The report estimated natural gas would average $3.64 per thousand cubic feet, down 0.5% from 2025 levels.

The MPSC publishes seasonal energy appraisals to monitor fuel supplies, pricing trends and demand projections for Michigan households and businesses. Officials said the report reflects continuing volatility in global energy markets and the growing challenge of balancing reliability with affordability for consumers.