Duluth drivers feel more pain at the pumpWith retail gas prices reaching $3.99 per gallon in Duluth on Monday, $4 per gallon won’t be far behind.
By: Candace Renalls, Duluth News Tribune
With retail gas prices reaching $3.99 per gallon in Duluth on Monday, $4 per gallon won’t be far behind.
That’s the forecast from Patrick DeHaan, senior petroleum analyst with GasBuddy.com, which keeps track of gas prices in Minnesota and across the country.
But that $4 a gallon for unleaded won’t last, he says.
“It won’t spend a whole lot of time there,” said DeHaan, who expects prices to drop to the mid-$3 range in Duluth by late November. “Stations hesitate to raise prices to the magical $4. I don’t think it will remain there more than a few weeks.”
DeHann said prices are especially high because Hurricane Isaac caused oil rigs in the Gulf of Mexico to temporarily shut down and refineries to cut back production, slowing supply lines. He said Duluth sees higher prices than the southern part of the state because it is farther away from the supply infrastructure.
That didn’t placate consumers who were greeted with the nearly $4 a gallon price tag at the pump Monday.
“It’s too high, I just hope it doesn’t go too much higher,” said Chris Untiedt, 39, of Saginaw as he filled up his Toyota Highlander at the Mount Royal Holiday gas station on Monday afternoon.
As prices rose in recent months — in part because of a pipeline rupture and shutdown in Wisconsin and equipment problems at two refineries — Untiedt has cut back on his driving, consolidating his trips to school, work and errands. He admits he’s gotten used to paying $50 for gas with each fill-up, though it would be more if let his tank get lower than he does.
“It is what it is, there’s not much you can do about it,” he said.
At the next pump, Stephanie Thompson, 42, of Duluth has also conserved.
“I just put in as much as I need to get to my next paycheck,” she said after pumping 4.7 gallons costing $19 into her car.
Thompson — who paid $3.62 per gallon in Stillwater last weekend — wasn’t happy.
“Never in my life have I seen it break $4 in Duluth,” she said. “I don’t know why it’s so expensive here.”
Been here before
Actually, the price of gas has reached $4 per gallon in Duluth before. It reached that in May 2011 when the statewide average peaked at $3.97 a gallon and then again in early June 2011. And in June 2008, it surpassed $4 per gallon in Duluth when the statewide average reached $4.
Although the gap is currently greater, prices in Duluth are on average five cents more than the state average, a News Tribune analysis of state gas prices discovered last year.
Much of the Duluth area’s crude oil comes from Canada. The Calumet refinery in Superior converts the crude into gasoline, then sends it through a pipeline to terminals in Esko, Wrenshall and the Twin Cities. Distributors fill up from those terminals and drive the gasoline to Duluth and other destinations.
The Twin Cities, however, has the economic advantage with two much larger refineries in southern Minnesota and a more competitive retail market that drives prices down. Moreover, some of Duluth’s gasoline comes from a refinery in the Minneapolis area, DeHaan said.
Corena Mandelin of Duluth has her own theory.
“Gas prices are going up because of the upcoming elections,” she said with conviction. “It has everything to do with politics and to make our president look bad. We need to start getting our own oil and stop playing games with foreign countries. They raise their prices, they drop their prices. What’s that all about? I don’t know who has control over it, but the people don’t.”
Summer not over
In the last week, the average retail gasoline price rose 6 cents per gallon in Minnesota, which is a half-cent higher than the national average.
DeHaan said prices have also risen because they haven’t reached their summer peak yet. That will happen soon, before the usual fall decline in prices, he says.
“Prices tend to drop as the weather tends to cool and demand goes down,” DeHaan said. “They bottom out between Thanksgiving and Christmas. Duluth prices probably will be in the mid-$3 range between then. So we will see some relief as the weather cools.”
Winter gas also is cheaper to produce. It doesn’t have to meet such stringent air pollution laws because cooler weather results in less air pollution from car exhaust.
Nick Mueller, a 21-year-old college student, didn’t notice the higher prices until he reached for the gas pump nozzle in Duluth on Monday.
“Oh, it’s nearly four bucks,” he said. “Geez, it’s high.”
He estimated he spends $70 or more every two weeks to fill up his Jeep Commander, amounting to one-third of his monthly expenses. But he took it in stride.
“I can’t do anything about it,” he said.