Throughout the Rockies, gasoline is much cheaper than it was a year ago.
Not so in Durango.
In Denver, regular gas averaged $3.05 per gallon Tuesday morning, down a quarter from $3.30 a year ago. The same trend held in Grand Junction, where gas was $3.16 on Tuesday, down from $3.40 a year ago, according to AAA’s Fuel Gauge Report.
Albuquerque drivers were paying $2.98 on average Tuesday, down from $3.23 a year ago.
In Durango? Despite recent declines, regular gasoline averaged $3.28 per gallon Tuesday, up slightly from about $3.27 a year ago.
So what gives?
Experts provide no satisfying answer. Instead, they point to a number of rapidly shifting variables – transportation and refining costs, customer volume, competition among gas stations and the choices of individual gas-station operators.
“There are so many variables that go into that question,” said Gary Hanson, spokesman for El Paso, Texas-based Western Refining. Hanson said Western Refining does not comment on local gas prices.
Colorado AAA spokeswoman Wave Dreher said gas is cheap in Denver in part because of pipeline terminals north of the city. The lower transportation costs for gas translate to lower pump prices, she said.
Denver typically has gas prices well below the national average, as does Albuquerque, which also has nearby pipeline terminals.
Mark Larson, executive director of the Colorado Wyoming Petroleum Marketers Association, said Durango is limited by its reliance on Western Refining’s Gallup refinery, the only active refinery in the Four Corners. The next-closest terminal is in Albuquerque.
“In order to get fuel that’s not Western Refining fuel, (retailers) have got to go a distance and pay a price,” Larson said.
He added, “They’re really the only game in town unless you go to Albuquerque, and nobody’s going to do that because you have to pay the freight cost.”
Other pipeline terminals are in Denver and Fountain. Grand Junction’s rail terminal has been affected by recent floods that knocked out railroad bridges, Larson said.
Crude oil accounts for the majority of retail gasoline’s price, about 71 percent, according to the federal Energy Information Administration.
Taxes account for 13 percent of gasoline’s cost, distribution and marketing 11 percent and refining 5 percent.
Gas stations typically have a profit margin of 10 to 20 cents per gallon, Larson said. He said station owners are not to blame for Durango’s relatively high gas prices.
“Our margins traditionally haven’t changed ever since I bought my truck stop in Cortez in 1982,” said Larson, former owner of M & M Truck Stop.
Gas prices are becoming less relevant to more and more Americans’ budgets. More Americans are living in cities and driving less, federal data show.
In 2012, 347 million gallons of gasoline per day were sold in the U.S. That was down nearly 8 percent from five years earlier.
“Demand is down,” Larson said.
Gas prices tend to hit their trough in December and peak in summer around Labor Day weekend. If anything, gas prices could drop more before the year is over, according to forecasts. AAA’s December forecast said gas prices may drop another 10 to 15 cents nationally.
“I sure hope so,” said Dreher. She noted crude prices are low – below $97 per barrel – while hurricane season was a no-show, easing fears of supply disruptions.
“Nothing we’re predicting should have a major impact on gas prices the rest of the year,” she said.
That’s good news for Durango drivers like Becca Rodman. She said she closely watches gas prices because she commutes from Hesperus to her job as a preschool teacher in Durango.
“They’re a little lower than they’ve been, which is nice,” she said. “It would be nice if they were under $3 a gallon, but it reflects where gas prices are going.”
Durango gas prices are down 9 cents in the last month, but Rodman is budgeting for higher prices just in case. She plans to drive her family to Denver for Christmas.
She said she hopes hybrid and other fuel-efficient vehicles close the price gap with traditional vehicles.
“It would be great if the fuel-economy cars were less expensive,” she said. “There are those options, but they’re expensive.”
Bruce Moss, owner of Durango’s Gateway Reservations, said he does not expect gas prices to impact travel this winter. Other factors such as ski lift tickets and lodging matter more, he said.
“Overall, it’s probably pretty insignificant,” he said.
cslothower@durangoherald.com
