Twin Cities gas prices rise to over $4 per gallon, higher than national average

MINNEAPOLIS (FOX 9) - Gas prices are up in the Twin Cities and across the United States as tensions escalate between the United States and Iran and amidst Ukrainian attacks on Russian oil refineries.

Twin Cities gas prices higher than national average

By the numbers:

According to GasBuddy’s survey of 1,106 stations, the average price for gasoline in the Twin Cities is now $4.09 per gallon, up 16.6 cents from last week. Prices are 46.6 cents higher than a month ago and stand $1.10 higher than a year ago.

The cheapest gas found in the Twin Cities yesterday was $3.59 a gallon, while the most expensive was $4.69, a difference of $1.10. Statewide, the average prices yesterday ranged from $3.52 per gallon to $5.02 per gallon, a difference of $1.50.

The national average price for gasoline is 13 cents per gallon higher than last week, at $4.06 today. The national average is 23.9 cents higher than a month ago and 95.6 cents per gallon higher than a year ago.

Neighboring states are also seeing increases: Wisconsin is at $3.88 per gallon (up 9.5 cents), Sioux Falls, South Dakota is at $3.94 (up 10.6 cents), and the Minnesota statewide average is $4.04 (up 16.8 cents).

Minnesota’s average gas prices are higher than its neighbors, and the Twin Cities average is 0.05 cents higher than the statewide average.

When will gas prices go down? 

Big picture view:

According to Patrick De Haan, head of petroleum analysis at GasBuddy, the fluctuation in prices is largely due to global conflict and resolution. If the U.S. and Iran negotiate or agree on a peace deal, prices could decrease, but there is no guarantee that will happen, he said. 

"Over the weekend, seemingly a pause. Though there hasn’t been much said definitively from the White House or from Iran, it does appear that tensions cooled over the weekend—no new attacks—and that has oil prices declining on the possibility (there have been discussions) that Pakistan would like to lead another round of mediation talks," De Haan told FOX 9. "For now, oil prices [are] down about $5 a barrel so far this morning and that could point out that this week we could see some stability."

The U.S. and Israel’s war with Iran led to a global energy crisis, mainly because of supply chain and production disruptions of crude oil across the Middle East, according to The Associated Press. Crude oil is the main ingredient in gasoline, and fluctuating prices are largely due to its production disruptions, but there are other factors impacting gas prices, De Haan said.

"It’s not just the U.S. and Iran," De Haan said. "An unfolding situation is Ukraine has attacked major Russian oil refineries. In fact [they attacked] another one over the course of the weekend. Those refinery attacks are disconnecting the price of oil and gasoline, because, of course, you need a refinery to get products like gasoline, diesel and jet fuel." 

The backstory:

Changes in oil prices versus the number at the gas pump can be understood through two markets: future and spot markets. De Haan said a lot of Americans look at future oil prices, which aren’t reflected at the pump yet.

"There is also a spot market for what you pay on the spot," De Haan said. "That’s what retailers are paying: those spot or wholesale prices, and (those move down) if oil plummets today, those wholesale prices will plummet later tonight, but stations only buy gas every two to four days, theoretically. That means a station that just filled their underground tanks yesterday may not be buying that cheaper gasoline that we could see later today, until conceivably later this week, and only then will they start to lower prices a few cents every day. That’s why those decreases can take a week or two to really amount to something."

What we don't know:

Any new escalations or attacks can push oil prices up, whereas de-escalations or peace deals can decrease prices, according to De Haan.

"Who knows what direction we’ll see," De Haan said. "For now, though, oil [is] down significantly this morning — that may set the pace for where we go this week."

Gas PricesBusinessMinnesota