Gasoline prices above $3

By Tom Hintgen (Contact) | The Daily Journal

Published Friday, May 11, 2007

Unleaded regular gasoline prices ranged from $2.99 to $3.09 per gallon this morning in Fergus Falls as wary consumers stopped at the pumps and filled the tanks of their cars, trucks and other vehicles. Reactions varied.

“I just came off the interstate and I’m paying $3.09 here on the west side of Fergus, and I don’t want to take the time to shop around,” Moorhead retiree Jerry Kilfowl said. “I had a medical appointment in Rochester and I’m anxious to get home. I’m not happy about paying over $3 a gallon but things are out of my control.”

Kilfowl, a retired farmer and trucker, said it’s his opinion that neither oil producers or the U.S. government and Congress is doing enough to find ways to hold down prices.

Another person filled the tank of his vehicle next to Kilfowl. Based on $3.09 per gallon and putting in only 5.44 gallons of unleaded regular, the bill — nonetheless — came to $17.18.

Unleaded regular prices at both Cenex and Tesoro on the west side of town were $3.09 per gallon this morning.

Prices were 10 cents lower in other parts of town, including $2.99 per gallon for unleaded regular at both Holiday Station and M&H in downtown Fergus Falls. South of Fergus Falls, at Tesoro adjacent to Big Chief Cafe at the junction of Interstate 94 and Highway 82, the price per gallon of unleaded regular also was $2.99.

Even though $3.09 per gallon at some stations in the Fergus Falls area may seem high, which it is, it’s lower than in some other area towns. In the last three days prices have reached $3.14 per gallon of unleaded regular in St. Cloud and $3.19 at some stations in Moorhead.

Unexpected refinery problems are a big part of the reason for the spike in gasoline prices of recent weeks, according to some economic analysts. They point to at least a dozen additional partial shutdowns in the U.S. and internationally that cut refining capacity.

For instance, one of the nation's largest refineries, a BP PLC plant in Indiana that processes more than 400,000 barrels of oil per day, will not be operating at full capacity for several months due to unexpected repairs. Other examples include a 170,000-barrel-per-day plant in McKee, Texas, that was shut down for a month.

A 470,000 barrel-per-day plant in Texas City is operating at less than half of capacity.

The refinery problems have led to an oversupply of oil, and an undersupply of gasoline.

“In a free market economy, there are two basic ways to bring down the price of a product — increase supply or cut demand,” Steve Hargreaves, CNNMoney.com staff writer said. “There are no easy answers.”