Colorado gas prices continue to rise despite typically being lower during this period of the year.
According to AAA as of Monday, the statewide average price for a gallon of regular gas is $4.30, which is still less compared to the national average of $4.47. That price remained the same from a week ago, but up $1.16 from a year ago. Diesel is at $6.13 — up $0.27 from a week ago and $2.62 a year ago.
AAA spokesperson Skyler McKinley said that gas prices are typically lower in September than during the summer due to the end of the summer travel season. But, structural pressures overseas have caused prices to rise, including the war in Iran.
“Most of those relate to the prolonged closure of the Strait of Hormuz,” McKinley said. “Some of them relate to refining capacity. And the new wrinkle is the closure of the alternate ability to get fuel out of the region where the conflict is occurring with the Saudi pipeline coming offline.”
The Strait of Hormuz has been a focal point of the war in Iran since it began earlier this year. Both the United States and Iran have blockaded ports and the strait. There have been over 80 attacks combined in the area.
“Structurally, prices should be falling. We just switched over to winter blend,” McKinley said. “There should have been 15 cents in savings we saw off the top. Likely that pressure did come into the system, but was outweighed by the pressure being drawn.
But, economic domestic issues have also been factors into high gas prices.
Grier Bailey is the executive director of the Colorado, Wyoming Petroleum Marketers & Convenience Store Workers Association that represents wholesale fuel distributors and retail gas stations in Colorado and Wyoming. He said the lack of refining capacity has also played a role in gas prices staying high.
“For over the last five, six years in particular, including in California, that just lost 20% of the refining capacity. And so I would say it’s more of the fact that there’s not a lot of product regardless of the war in Iran,” Bailey said. “Refineries are shutting down and people are trying to scramble to service those markets where the refineries are getting out of for whatever reason. And so that’s a new dynamic this year in particular.”
Over 80% of all fuel that Colorado consumes comes from the Denver Metro Northern Front Range terminal. Suncor‘s Commerce City refinery processes 103,000 barrels of oil per day for the state.
As a whole, Colorado does about 2.2 billion to 2.3 billion gallons in total sales per year. Excluding construction companies, agriculture, and airports, there are 500,000-600,000 gas transport truck deliveries a year in Colorado.
“It depends on volume,” Bailey said. “The high volume stations in Denver, Colorado Springs, Fort Collins, they might get a couple loads a day depending on their tank volume. Depending on the size of the station and the size of the underground storage tanks and the storage capacity of those tanks, a lot of that dictates how often they get fuel.”
The Western Slope has some of the highest gas prices in Colorado. Thirteen counties have reported averages between $4.51-$4.74. Three counties have gone over $5.00 with Pitkin County being the highest at $5.74.
Logistical and transport costs play as factors for petroleum distributors in prices in those areas. Bailey said regardless of the fuel price, there’s a cost to move around the state.
“Up there in communities that are smaller and especially in the resort communities, the volumetric throughput is a lot, lot less.,” Bailey said. “And so that puts pressure on other parts of the business. And something that people don’t think about is, well, gasoline for sure is the vast majority of how people have gross revenue at retail stations.”
On Monday, Sept. 21, the cheapest gas prices in Metro Denver was at the Shell station in the 13700-block of 6th Avenue in Aurora at $3.55. That’s crowdsourced data according to GasBuddy.com.
In Colorado Springs, the price for regular at Murphy USA in the 8000-block of North Academy Blvd. and the Valero station in the 1700-block of Briargate Boulevard is $3.85 per gallon. In Pitkin County where gas prices are the highest, the Conoco station Snowmass on State Hwy. 82 is $5.59 for regular fuel.
