Average ND price for gas: $3.64 per gallonAs is the case most years, warmer months often bring higher prices at the pump.
By: Bryan Horwath, The Dickinson Press
As is the case most years, warmer months often bring higher prices at the pump.
This year, however, gas prices have been raising their eyebrows of motorists a little earlier than usual as prices have shot up rapidly in recent weeks after a steady decline in western North Dakota from late last year into early 2013 placed prices at close to $3 per gallon for unleaded gasoline.
In a matter of a few short weeks, prices jumped about 50 cents per gallon in Dickinson, with service stations charging up to $3.64 for a gallon of unleaded Saturday. For a number reasons — including the usual change in blends of gasoline by refineries for the summer — a spike at the pump was to be expected, but not many predicted the rapid rise seen.
“There a number of factors at play,” said Gene LaDoucer of North Dakota AAA. “The current reasons are a series of planned and unplanned refinery outages, the approaching switch to summer-blend gasoline, hopes of stronger economic growth in the U.S. and overseas and this is the time of year when gas prices trend higher in advance of the busier summer travel season.”
What’s different about the current upward trend in prices is that people in western North Dakota — which often features some of the most expensive prices at the pump this side of California — seem to be getting a bargain, even in light of the rise. Prices in the central and eastern part of the state saw the price of a gallon of unleaded gasoline jump to as much as $3.79 in some places.
Gas prices in places that have traditionally been lower than southwestern North Dakota and Oil Patch prices like the Twin Cities of Minneapolis and St. Paul, Minn., had the cost of a gallon of gas hovering around the $3.80 mark this week.
“When prices go up like this, it affects everybody out on the roadways,” said a water tanker driver who wished not to be identified Saturday while filling his truck at the Tiger Discount Truck Stop in Dickinson. “It tends to happen and it’s just something that we all have to live with.”
LaDoucer said that some of the reasons why prices have been trending sharply have nothing at all to do with supply and demand or seasonal driving.
“The current run-up is being driven in large part because of speculative investing,” LaDoucer said. “Certain factors have energy traders bullish, leading to large investments in energy commodities like oil and gasoline.”
The yo-yo effect of gas prices can leave some drivers shaking their head while others take the ups and downs in stride, knowing there’s little motorists can do to influence the market.
“It’s a company expense for me, but I know that higher fuel prices aren’t going help the company or its employees,” said Troy Hamilton, a driver for a Dickinson trucking company who filled his vehicle at West Dakota Oil near a sign showing $4.09 for the price of a gallon of diesel Saturday. “You notice it when you’re spending $300 per day on fuel. The thing is, we don’t really have any control over it, so you can’t let it bother you.”
LaDoucer said the apex of the yearly rise in gas prices is usually around the months of May and June.
“We’re likely near the short-term highs,” LaDoucer said. “The pace of increase should slow, but it’s unlikely prices will drop soon. We believe the annual peak average will be less than what it was in 2012 in North Dakota, which was $3.94. We expect the peak average for this year to be below $3.80 per gallon.”
LaDoucer said the ever-growing supply of domestic U.S. oil production — thanks in part to the activity in the Bakken in recent years — is likely to help limit volatility in the oil and gasoline markets. As of Friday, LaDoucer reported the average cost of the gallon of gas in North Dakota was $3.64.