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Gas prices

What it costs to live here: Feeding the cost of fuel

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Drivers familiar with various parts of the region know that gas is not sold in a uniform market.

But with an industry that posts prices on tall signs visible for blocks, it is easy to ask, "Why do we pay a different price than another town?"

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"It's the age-old question," said Paul Mutch, vice chairman with the North Dakota Petroleum Marketers Association.

Of the costs we regularly pay to live, the price of keeping gas in the car, keeping the lights on and the house warm take a significant piece of our incomes.

Gasoline prices can change daily, but a look at a map of gas prices by county show a pattern: around Bismarck and Mandan, gas is highest. Grand Forks County is another expensive spot, but a little lower, and so are Minot and Devils Lake areas. McKenzie and Slope Counties, out west, are lower but Cass County is the lowest.

The price of regular unleaded on Friday in the Fargo area was on average $3.60 a gallon, according to AAA North Dakota. In Grand Forks, the average was $3.75. Other prices Thursday: Bismarck, $3.83; Minot, $3.81; and Williston, $3.85.

Fargo's low prices are nothing new.

"Grand Forks is making some money and we're not," said a Fargo gas station owner in September 1997, when gas there was $1.25 while Grand Forks drivers were paying $1.34. "It's our turn to have a gas war. Next year, it could be Grand Forks."

Market difference

A gas war is a frequent explanation for Fargo's lower prices, as are the fact that it is a bigger market than anywhere else in the state and the crossroads of two interstates that bring a greater volume of vehicles passing through the metro area. The extra volume allows retailers to make up for the lower price.

"The best-pumping gas station would be less than the best-pumping station in Fargo," said Mutch, who is in the wholesale gasoline business, not retail.

In Minnesota, Clay County was one of the cheap counties Aug. 10, along with a cluster in the north central part of the state, in a range of $3.68 to $3.73 per gallon, according to MinnesotaGasPrices.com.

Beltrami County was slightly higher, with gas in Bemidji at $3.75 on Friday, according to AAA. St. Louis County was higher still, and gas in Duluth was mostly at $3.85 on Friday.

The highest-priced Minnesota Counties last week were Koochiching and Cook, on the Canadian border. The cheapest was Martin County, on the Iowa border.

Differences in taxes on gasoline sales account for some difference in price between North Dakota and Minnesota. Drivers in North Dakota pay 41.4 cents per gallon in taxes while Minnesota drivers pay 47 cents per gallon, according to the American Petroleum Institute.

AAA North Dakota spokesman Gene LaDoucer said price differences between markets are nothing unusual for gasoline or any other commodity, but how it is advertised makes it a more emotional subject for consumers who usually have no choice but to pay it.

"Gasoline impacts all of us, and it is something the price of which is readily available to us," he said. "It's posted on every street corner."

Home energy

Another component of consumers' regular energy spending comes home to them in a monthly bill from utility providers.

In Grand Forks, Fargo and Minot, many electric and natural gas consumers write checks to Xcel Energy. The company's North Dakota residential customers use an average of 850 kilowatt-hours per month at 8.85 cents per kwh, or about $75 a month, according to the company.

Montana-Dakota Utilities powers much of western North Dakota, including Bismarck-Mandan and Williston. The company's average household consumption is 750 kwh a month at a rate of 7.4 cents per kwh, or about $55 a month.

In Minnesota, Otter Tail Power customers in Bemidji and other places use an average of almost 800 kwh a month. From June through September, they pay 7.976 cents per kwh, or $64 on average, and 8.192 cents per kwh, or $65 on average.

Customers of Minnesota Energy, based in Duluth, use an average of 750 kwh a month and pay 8.9 per kwh, or $67 a month.

Heating rates, though a large expense in northern climates, are harder to generalize, said Mark Nisbet, Xcel Energy's principal manager for North Dakota. Some customers depend on electric heat while others use natural gas. The price of natural gas can fluctuate each month, creating varying gas bills. Utilities charge delivery fees -- $18.48 per month for Xcel -- and the rest is based on the cost of gas, which is in a low period during a high gas production.

"We're really charging for our delivery service and getting our meters read," he said.

Naturally, what customers pay also depends on their homes' size and efficiency and how warm they like it, Nesbit said.

"A lot of it is situational," he said. "We tell our customers, if they can find ways to save energy, we certainly encourage that."

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