Gas prices rising but unlikely to spike
By the Numbers
Here’s a look at Feb. 23 gas prices from Gypsum to Vail. All prices are per gallon of regular fuel.
$2.15: Costco, Gypsum.
$2.25: Stop N Save, Gypsum.
$2.25: Loaf ‘n Jug: Eagle.
$2.45: Stop N Save, Edwards.
$2.50: Conoco, Avon.
$2.55: Conoco, Vail.
EAGLE COUNTY — For a brief moment, $2 per gallon gasoline came to the Vail Valley. But, like most beautiful dreams, it couldn’t last.
The price of gas is still far lower than it was this time in 2014 — it’s an average of $1.32 per gallon cheaper in Vail — but the cost of a gallon of gas is bumping back up. According to an online price map published by AAA Colorado, Monday’s price at the Edwards Stop ‘N Save station was $2.45 per gallon. Prices at other stations in the area were hovering within a dime or so of that price, depending on whether you bought fuel in Eagle or Vail.
The current price bump is due to a few factors. Patrick DeHaan, senior petroleum analyst for GasBuddy.com, a nationwide fuel-price tracking service, said the price of oil actually plays a supporting role in the cost of fuel. The price of crude oil has cratered in the past several weeks, hitting a low of around $43 per barrel in January. As of Friday, that price had increased to around $49 per barrel, although the price went above $50 per barrel last week.
REFINERIES ARE KEY
Reached by phone at his Chicago office, DeHaan said the more important factor in the fuel price equation is found at the nation’s oil refineries. Gasoline use declines a bit in the late winter and early spring, due largely to a drop in pleasure travel. Lower demand gives refineries a chance to perform annual maintenance, and those facilities shut down parts of their operations.
A decrease in supply will result in an increase of between 25 and 50 cents per gallon, DeHaan said. Prices stabilize, and sometimes decline, as refineries ramp back up to full production. It’s also more expensive to make gasoline blended to burn more cleanly in the summer. That also affects fuel prices in the summer driving season.
Wave Dreher, the public information person for AAA Colorado, said refinery maintenance used to take place more in April, but in the past few years it has been pushed into February.
The result of that annual increase may push the price of gas near, or above, $3 per gallon in some places, depending in large part on location. For instance, the Feb. 23 price of gas was $3.60 per gallon in Aspen. It was 90 cents per gallon less expensive in Basalt and was about $2.25 in Glenwood Springs, a far bigger spread than seen between Gypsum and Vail along Interstate 70.
Extreme weather and accidents at refineries can also affect regional prices, DeHaan said. A recent explosion at a Los Angeles refinery caused a 20-cents-per-gallon increase in area oil prices within days, DeHaan said. Extreme cold in the eastern U.S. has also hampered production there. But those incidents aren’t enough to affect fuel prices nationally.
DeHaan said that, contrary to popular belief, falling prices are actually more favorable for retailers. Station operators, the vast majority of whom are independent business owners, are able to save on credit card processing fees and other costs when prices are declining. When prices go up, fees and costs go up as well, cutting into station owners’ bottom lines.
WHAT TO EXPECT
While gas prices spike every year, how high will they go?
Barring a large-scale disaster somewhere in the oil-producing world, Dreher said AAA’s analysts expect the price of oil and the price of gas to remain fairly stable.
“We’re forecasting prices to stay below last year’s average for the rest of the year,” she said. That means drivers in much of Colorado can expect to buy gas for less than $3 per gallon for some time to come.
Still, prices are going up at the moment, which creates the opportunity to complain.
“We were only below $2 a gallon for a few weeks,” Dreher said. “But people are still griping about prices now.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org or @scottnmiller.
Demonstrators attached protest signs to ski poles and hockey sticks in Vail on Saturday at the 2020 Women’s March.