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Is pressure at the pumps easing in North Dakota, Minnesota?

The average gas price on Tuesday in North Dakota was $3.63 a gallon – about 14 cents below the national average of $3.77.

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Gas prices in Grand Forks photographed Thursday, Oct. 20, 2022.
Eric Hylden/Grand Forks Herald
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GRAND FORKS – Abby Kendall hasn’t let increased gas prices stop her from doing what needs to be done — shuffling kids to basketball games, running errands, going to work.

On average, it costs her between $65 and $70 to fill her minivan, which she does about every week. It doesn’t get good gas mileage, she said — a scenario to which others may relate.

What’s more, Kendall is manager of Valley Dairy at 4701 S. Washington St., where she sees others fill their tanks regularly. Business, she said, has remained steady even during the higher prices.

At least they’re not as high as they were earlier this year.

Gas prices have remained relatively stable over the past couple of months in North Dakota, according to Gene LaDoucer, director of public affairs with AAA North Dakota.

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The average gas price on Tuesday in North Dakota was $3.63 a gallon — about 14 cents below the national average of $3.77, according to AAA. At Kendall’s store, however, the price was $3.49 a gallon for regular unleaded ($5.39 for diesel).

LaDoucer said consumers might see prices dip more by year’s end — barring any unforeseen circumstances in the world that would cause them to spike — in part due to decreased demand for gasoline during the cold months.

“It helps to relieve some of the pressure on the refining system, allowing gasoline prices to remain stable,” he said. “And hopefully here, as we look over the winter months, they can decline further from where they are currently.”

In Minnesota, prices were a little higher on average, at $3.66 a gallon.

“In June, we were still high at $4.70. It started coming down in July and then kept making slow decreases until we reached about $3.65 on Oct. 3,” said Meredith Mitts, public affairs specialist with AAA Minnesota. “It was a very slow but steady decline from the middle of the summer.”

She said prices did begin to spike in mid-October, but by the time she spoke with the Herald they were starting to come back down again.

“What we're seeing is that a fear of global economic recession is leading to a drop in the crude oil prices, which is helping us keep those pump prices down,” she said. “Additionally, we've seen that turnaround in the number of people driving and traveling, so there's less demand at the pump. With those two things combined — the lower prices for crude oil and less people demanding gas — we're seeing those decreases at the pump prices and, assuming everything continues on course, we anticipate seeing those prices even coming down maybe a little bit faster.”

In an effort to ease wallets, President Joe Biden in June asked Congress to suspend the federal gas tax for three months, through September, without taking any money away from the Highway Trust Fund. He also called on states to take similar action to provide some direct relief at the pump.

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Connecticut and New York governors temporarily suspended their states’ gas taxes, and governors in Illinois and Colorado delayed planned tax and fee increases. Other states, some even before Biden made his announcement, allowed gas-tax holidays.

Minnesota and North Dakota did not suspend the gas tax this year. But North Dakota in January did raise its gas tax from .21 cents a gallon to .23 cents per gallon. Minnesota’s gas tax is .25 cents per gallon, but with a surcharge of 3.5 cents, making the total 28.5 cents a gallon.

“There’s not a whole lot we can provide right now on this outside of where things stand currently,” said Ryan Brown, senior media specialist with the Minnesota Department of Revenue. “Minnesota's gas tax sits at 28.5 cents and has been that way since FY2013 when the surcharge of 3.5 cents reached its max that was set forth in the 2008 session. There have been proposals since, but nothing has been passed and signed into law since 2008.”

Mike Nowatzki, communications director for North Dakota Gov. Doug Burgum, said he is not aware of any upcoming legislation that would affect the gas tax. But Burgum and Lt. Gov. Brent Sanford continue to keep their eyes on the market.

They “are continually advocating for the administration to unleash American energy supplies so we can sell energy to our friends and allies versus having to buy it from our adversaries and be subject to the volatility that comes with being dependent on foreign sources for energy,” Nowatzki said in an email to the Herald. “Energy security is national security and will be reflected in the price at the pump.”

Sen. John Hoeven, R-North Dakota, said eliminating the gas tax is not the answer to the inflation problem at the pump.

Suspending the gas tax is like putting a Band-Aid on the problem, he said, as is “taking oil out of the Strategic Petroleum Reserves,” something he noted the Biden administration is doing. “That's a Band-Aid, that's not a solution. The solution is obvious. It's right here, it's common sense: Produce more oil and gas here at home, starting with North Dakota.

“We need to get the Biden administration to take the handcuffs off our energy producers. We can produce a lot more oil and gas in this country — we can produce a lot more oil and gas in North Dakota — but we've got to get through this regulatory burden that the administration has put in place.”

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He said North Dakota currently is producing a little more than a million barrels of oil a day, but during the Donald Trump administration it was 1.5 million day — “and we should be producing more than 1.5 million barrels a day,” Hoeven said.

“To put that into a national context, right now the country is producing 11.8 million barrels a day, but we were producing 13 million barrels a day — and we should be producing 14 or 15 million barrels a day. More supply brings the price down; it's supply and demand. … But again, that's why I say the administration's got to take the handcuffs off.”

Meaning, in part, Hoeven said, the administration needs to suspend its moratorium on producing oil and gas on public lands. “The infrastructure we need to move that energy to market, whether it's oil or natural gas, that's a big issue as well,” he said.

It is not only gas prices that are inflated these days, but other commodities and items. As such, Mike Rud, president of North Dakota Petroleum Marketers Association, said putting any additional tax to gas would not be a good pursuit.

“The thing that most worries any operating retailer right now would be adding any additional increase to the price of gas,” Rud said. “I don't know if there's an appetite in North Dakota to go down that road again with the session coming up … but the last thing you need to do is tack on any more cost burden to the consumers.”

As things stand now, commuters should plan for the worst but hope for the best. There are some things they can do, however, to lessen their own pain at the pump, LaDoucer said, noting some of that pain is “driven by personal behaviors. Some ways individuals can save is by driving more conservatively, driving more fuel-efficient vehicles, those types of things; but from lawmakers’ standpoint, there's not a whole lot that you can do.”

Mitts offers this advice: Make sure vehicles are up to date on maintenance, including making sure a vehicle’s oil is changed at the appropriate times, that it has clean air filters and the correct amount of air in its tires.

“These things really do help your vehicle to run better,” she said, and helps the vehicle use the optimum fuel amount. She also suggested that commuters plan their routes beforehand, so they’re not backtracking when running errands, for example. Signing up for fuel savings at gas stations also can help. And, gas prices are likely to be higher near an airport, an interstate entrance-exit ramp, or a major shopping center due to the convenience factor, and so it is best to fill up a little farther away from these locations when possible.

“Don't necessarily go out of your way, but if you know you're going to pass multiple gas stations, just keep an eye on what those prices are and get whatever makes sense for where you're at,” she said.

Will gas prices ever hit in the $2 range again? That’s tough to tell, Mitts said. But there is always hope.

“There are a lot of things that are currently playing into the prices that we're seeing,” she said. “The market is very volatile. There's a lot of uncertainty still, both between the pandemic and civil unrest on an international level. I don't think we're anticipating seeing those $2 prices again this year, but that's not saying that they'll never get back down there. It just might take a few years, if we ever are to get back down that way. But right now it's a very volatile market, and so it's a wait-and-see game.”

Andrew Weeks is editor of the Herald’s sister publication Prairie Business, a free monthly magazine that covers business trends in the Dakotas and western Minnesota. To receive a free monthly electronic edition, www.grandforksherald.com/prairie-business , click “subscribe” and then scroll to “Prairie Business monthly e-edition.”

Related Topics: BUSINESS
Andrew Weeks is an award-winning journalist who has reported for a number of newspapers and magazines. He currently is the editor of Prairie Business, the premier business magazine of the northern plains. The magazine covers various industries and business topics in the Dakotas and western Minnesota.
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