GRAND FORKS - Gas prices in North Dakota and Minnesota have increased about 8.5 cents per gallon the past week, a trend experts say will continue into late spring.

Prices at the pump usually start to increase after Valentine’s Day and continue to climb until April or May, according to Patrick DeHaan, head of petroleum analysis for fuel price tracking company GasBuddy.

“Last year, prices peaked around Memorial Day weekend, but it may be closer to April this year,” DeHaan said.

The current average price per gallon in North Dakota is $2.56, and the average price per gallon in Grand Forks is $2.59, according to AAA. The average price in East Grand Forks is $2.55. Minnesota’s average gas price per gallon currently is $2.60, according to AAA.

The 2018 average gas price in North Dakota peaked at $2.95 per gallon on Memorial Day weekend. By the end of June, prices dipped to $2.87 per gallon, then to $2.85 in July and down to $2.80 in September.

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DeHaan predicted state prices this year could peak between 10 and 30 cents more per gallon.

“But I don’t think we’ll see the statewide average reach $3,” DeHaan said. “You may see some stations that high, but not the average.”

DeHaan said North Dakotans will see gas prices continue to increase anywhere from five cents to 15 cents per gallon a week until things level off.

Historical prices

The average gas price this time last year in North Dakota was $2.59 per gallon. In 2017, it was $2.26. The national average in March 2017 was $2.28 per gallon.

According to AAA, the highest recorded average price per gallon in Minnesota was $4.27 in 2013. In North Dakota, the highest recorded average price was $4.23, also in 2013.

Ten years ago, the national average price per gallon was $1.98. In North Dakota, the average price was $2.01 per gallon, according to GasBuddy.

Prices recently have increased in all 50 states, according to GasBuddy.

In South Dakota, the current state average is $2.49, up 7.7 cents per gallon from last week's price.

In Fargo, the price per gallon is up 1.4 cents to $2.40 per gallon. Fargo has some of the lowest gas prices in the state, according to GasBuddy.

“There is a lot more competition at every level,” DeHaan said. “There are more gas stations.”

Fargo also is a bigger market than Grand Forks, said Cullen Goenner, professor of economics and finance at UND. More people are not only buying gas but stopping in the convenience store for cigarettes or a snack, so gas stations can afford to lower their gas prices, he said.

Why do prices increase?

Gas prices increase in a cyclical manner for a number of reasons.

A large influence on the price of crude oil, and therefore gasoline, is the Organization of the Petroleum Exporting Countries cutting back on production.

“This is mainly to generate greater revenues,” Goenner said. “The major factor in gasoline prices is the main input, oil, and we’ve seen oil prices creeping back upward.”

OPEC wants to see higher prices per barrel, Goenner said of the move.

“They want more money, quite simply,” DeHaan said. “They don’t want it so high that it will push U.S. consumers to buy electric cars, but they want it high. They want it to stay around $60 a barrel.”

This also is the time of year when oil refineries are in a maintenance period, DeHaan said.

Refineries begin maintenance in mid to late February, which typically is a time when demand is low, DeHaan said. Maintenance can last from four to eight weeks.

“During maintenance, production is considerably lower, and at the same time, refiners’ pipeline specifications are starting to change because the EPA mandates cleaner gasoline in the summer months,” DeHaan said.

There are logistical issues during this transition and maintenance period, DeHaan said.

The “summer-blend” of gasoline varies from large metropolitan areas to rural areas due to local EPA regulations and requirements.

“The refineries don’t store gas more than a month or so, so there is no leftover summer gasoline from the summer before,” DeHaan said. “They are starting from scratch, but also doing maintenance so there is not as much summer gasoline available.”

The complexity of these various factors pushes prices up, DeHaan said.

Regional average gas prices as of Tuesday:

  • $2.59 in Grand Forks
  • $2.42 in Fargo
  • $2.59 in Minot
  • $2.64 in Bismarck
  • $2.53 in Fosston
  • $2.58 in Bemidji
  • $2.72 in Duluth
  • $2.58 in Minneapolis

Source: GasBuddy