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Gas prices dropping, still remain highest in the continental US

By Bryan Horwath /Dickinson Press

Recent changes in the ever-fluctuating price of gas in western North Dakota hold both good news and bad news for motorists.

The good news: After reaching all-time highs earlier this spring, prices have begun to retreat. The bad news: On average, North Dakotans are still paying the highest prices in the continental U.S. for regular unleaded.

“We always expect some issues at refineries during the spring and fall,” said Eugene LaDoucer of AAA North Dakota. “Unfortunately, this spring it went to the extreme. There was a lot of pressure put on the market and that’s caused a lot of consumer frustration and anger.”

Unleaded blends ranged primarily from $4.09 to $4.19 Saturday in Dickinson, which represented some of the highest fuel prices in the nation. The state average as of Friday for a gallon of regular unleaded gasoline was $4.06, topped only by America’s two outpost states, Hawaii and Alaska, LaDoucer said.

“We expect prices to continue to fall in the next several weeks,” LaDoucer said. “We expect to see prices back down to the $3.50 to $3.60 range later this summer. It’s a process where the regional inventories need to be built up again as they’ve fallen to levels we haven’t seen in over 20 years. It’s going to take some time to build those inventories up again and, until then, we’re going to see high prices.”

LaDoucer said the lower-than-usual inventories were due to planned and unplanned outages at a number of refineries charged with supplying areas in the northern Great Plains and Great Lakes regions. Average regular unleaded prices in Bismarck and Fargo were reported as lower, but not by much. Fargo averaged $3.98 as of Friday, with prices in the state’s capital being slightly higher at $4.04.

The national average is $3.61, with the lowest gas prices being found in South Carolina, which reported an average price of $3.22 for a gallon of regular unleaded, according to AAA.

Partnering with Sen. Amy Klobuchar, D-Minn., Sen. John Hoeven, R-N.D., was an original cosponsor of a bill last month to attempt to address the issue of high gas prices resulting from shortages in supply. Klobuchar formally introduced the legislation — which calls for refineries to report their maintenance schedule to the Department of Energy to prevent simultaneous closings — Thursday.

A spokesperson for Hoeven’s office said in an email Friday that the senator “believes the legislation is necessary and could help to control spikes in gas prices due to scheduled maintenance and unscheduled repairs.” The spokesperson added Hoeven will “work with Sen. Klobuchar to get the bill to the Senate floor.”

Both Hoeven and Klobuchar sent letters last month to DOE Secretary Ernest Moniz, asking him to use existing laws to help coordinate planned refinery shutdowns and maintenance schedules.

“Recent and simultaneous closures of several oil refining facilities in the Midwest region have drastically reduced supply and increased prices for North Dakota customers,” Hoeven wrote in his letter. “While I understand refineries are prohibited from sharing proprietary information about scheduled closers with other facilities to prevent collusion within the industry, operators, policymakers and consumers should be informed when multiple outages may cause spikes in gas prices and adverse impacts in the economy.”

Citing North Dakota and Minnesota as two states that are “more volatile” to price swings because of limited storage capacity for the petroleum that makes its way to the region, the “Gas Price and Refinery Capacity Relief Act” also calls for the DOE to study the feasibility of increasing storage availability in the Midwest.

LaDoucer said the implementation of the legislation could help curb price spikes in the future, but that it wouldn’t likely change the playing field for refineries.

“Part of it is that they want to see some transparency,” LaDoucer said. “They want government agencies to be able to see when refineries undergo planned maintenance schedules. Whether that would help or not, that’s hard to tell. You can also run into unplanned disruptions. Even starting up a refinery can often lead to unplanned outages. It has the potential to help out, but I wouldn’t anticipate that would totally prevent price spikes in the future.”

LaDoucer said most refineries, because they are businesses in competition with other fuel-refiners, don’t like to offer up internal information. He added, however, that providing more transparency within an industry that produces such a widely used and valued commodity as gasoline “would probably be a good thing.”

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