Fueling up: Review shows south Washington County gas prices often higher
Jordan Eignheer said he’s long noticed inconsistency at the gas pump.
Eigenheer, 23, of Cottage Grove, said the price of gasoline in south Washington County has always been higher than at stations in surrounding communities
“I really don’t know what causes the difference but it’s been like this since I first started driving,” he said while filling his tank for $3.25 a gallon at the Holiday gas station on Pine Arbor Boulevard earlier this month.
And fueling a 20-gallon vehicle each month, he added, “It hurts.”
A recent 10-week review of fuel prices by the Bulletin found that the average cost of gas per gallon in Cottage Grove was at most 8 cents more than in Woodbury. Even with an oil refinery located in St. Paul Park, local fuel prices often remain slightly higher in comparison to nearby communities.
During the 70-day period, there were 50 days when gas was lower in Woodbury, 13 days gas prices were the same and seven days the price was lower in Cottage Grove.
While the numbers at local pumps remain competitive— on average between 2 and 5 cents — the numbers are constantly changing.
A recent example of this disparity occurred earlier this month when the average gasoline price in south Washington County was holding steady at $3.29 per gallon, but in Woodbury fuel was $3.24. And 20 miles down the highway in Burnsville, the price was down to $3.16 per gallon.
On Jan. 10, Oakdale resident Mark Siefken was filling up his Chevrolet Malibu at the SuperAmerica on Lake Road Terrace in Woodbury, which sold unleaded fuel for $3.19 per gallon. While Siefken said he doesn’t regularly follow gas prices, he did say he was aware of the differences.
“It’s much more expensive down there,” he said. “Why would I go to Cottage Grove for gas?”
Eigenheer was fulling up in Cottage Grove the same day, where the price was 6 cents higher, and paid just over $63 to fill up his Mitsubishi 3000GT.
“I drive to Woodbury about once a month to fill up if it’s too expensive here,” he admitted.
Competition drives prices, expert says
While some blame the price disparity on holiday travel — AAA estimated roughly 92 million Americans drove at least 50 miles — University of Minnesota Economics professor Chris Phalen said other factors affect fuel prices.
“Things like the season and so forth move all gas prices together and have little to do with differences in gas prices for adjacent communities,” he explained. “(The difference in gas prices) is likely due to things like land prices, how many gas stations there are, competition, and whether the gas stations are close to a freeway.”
Nine gas stations serve the Cottage Grove, St. Paul Park, Newport area, three of which are along Highway 61.
In Woodbury there is about the same number of stations, a handful of which are located on either Interstate 494 or 94.
Northern Tier Energy did not return multiple Bulletin calls for comment regarding fuel prices at SuperAmerica stores in the area. Calls for comment to the Holiday headquarters and a BP representative also were not returned.
Those retailers’ prices affect small stations.
Gary Nelson, longtime owner of Duffy’s Union 76 gas station on Broadway Avenue in St. Paul Park, said he sets his prices based on nearby competition— the Northern Tier-owned SuperAmerica across the street.
“When they move a penny or less, or something ridiculous like that, I have to move,” he said. “So when they went to $3.25, I moved it three pennies (lower) for an afternoon. I have to compete.”
Having owned his station since 1971, Nelson said he has reluctantly adapted to the ever-changing fuel prices.
“Sometimes you’re forced into making very little because you have to follow SuperAmerica,” he said. “I’ll only go so low. But sometimes they have beat me by as much as 10 or 15 cents. But I’ve beaten them by as much as a quarter in an afternoon. Over the years everyone’s gone up, myself included. And you don’t want to go up, but you have to stay competitive.”
Even after more than 50 years as the owner, Nelson admitted, other than to compete, even he doesn’t know what dictates fuel prices in the area.
Fuel bill proposed
In an attempt to remedy a situation state Rep. Dan Schoen, DFL-St. Paul Park, recently called “ridiculous,” he proposed a “fair fuel prices bill” ahead of the upcoming 2014 legislative session that would ban gas stations near a refinery from charging more than an area average.
“We have a refinery in our backyard,” Schoen said in a recent interview. “Where is the inflated price coming from?”
Wondering the same question was Newport City Council member Steve Gallagher, who at a recent council meeting suggested the passage of a resolution supporting Schoen’s fuel bill.
“We’re being charged the highest amount and putting up with it,” Newport City Council member Tom Ingemann echoed. “Why should we be paying the highest price?”
The proposal aims to address many concerns Schoen said have been raised about the price of gasoline near refineries in the metro area, specifically Northern Tier in St. Paul Park.
“I think that all the residents that live near the refinery that hear the alarms that go off and the noises, that they should be getting a fair price for gas,” he said.
Minnesota Petroleum Marketers Association Executive Director Kevin Thoma said while he cannot comment on the business practices of petroleum companies, he did say the MPMA was aware of Schoen’s proposal.
He added the MPMA and Schoen have “a good working relationship and I am sure we will work on issues together in the future.”
Higher gas prices aren’t just gauging area drivers’ wallets, Schoen said, it is also literally driving people out of town.
“I’ve heard numerous times from many people that they don’t shop here in Cottage Grove because of the high gas prices,” he said. “Instead of getting gas and groceries here, they are heading to Hastings or Woodbury where it’s cheaper. Our local businesses aren’t getting that support.”
Schoen said he could not comment on whether or not he thought the bill would pass.
“At a minimum, this legislation would make Northern Tier and SuperAmerica come in and answer some questions,” he said, adding that his calls for comment during the creation of the bill also went unanswered.
“They need to explain why the gas sold to people a mere mile from the refinery has to be so much more expensive than (gas) down the road.”