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Climbing gasoline pump prices blamed on hurricane, refinery shutdown

Gasoline prices jumped to more than $4 per gallon Wednesday morning in Bemidji, although several stations dropped the price at the pump in the afternoon. Monte Draper | Bemidji Pioneer

BEMIDJI — Local gas prices spiked to more than $4 for a regular gallon of gas Wednesday morning before dropping below the dreaded number later in the day, leaving many station owners guessing.

 “The fours that are on my sign are nice and new and shiny,” said Mark Lindy, owner of Dick’s North Side auto repair shop and gas station.

Lindy’s shop had a $4.07 per gallon price on Wednesday, a price comparable to other local gas stations early in the day before many dropped to $3.95.

Gail Weinholzer, public affairs director for AAA of Minnesota and Iowa, said gas prices have increased since Labor Day because of Hurricane Isaac and the shutdown of oil refineries in the Gulf.

“They looked at it as an opportunity to begin the switch over from the summer grade fuel to the winter grade fuel,” Weinholzer said Wednesday. “As they do this they push down the supplies, causing upward pressure on prices.”

The difference between summer and winter grade gasoline is the Reid Vapor Pressure, which determines how quickly it will evaporate at high temperatures. The summer grade has a low RVP to handle the higher temperatures and avoid damage to the ozone.

Weinholzer said the switch usually does not happen until late September or early October, but since refineries were shutdown during Hurricane Isaac, many began the switch early.

Weinholzer said crude oil prices have been hovering around $97 per barrel, which is expected this time of year.

According to AAA’s fuel gauge report website, the average gas price in the state Wednesday was $3.909, up from an average of $3.883 one week ago and 13 cents up from the average a year ago. 

The national average on Wednesday was $3.858, nearly 21 cents higher than the average a year ago.

Weinholzer said the state has seen $4 averages on a number of occasions, but the last time prices were this high in the fall was seven years ago during Hurricane Katrina.

She said the prices will likely slip back down once oil refineries have switched over to the winter grade gasoline.

Meanwhile, Lindy said gas station owners often take the blame when prices spike, but he said the gas he is selling at $4.079, he paid $3.93 a gallon for.

“People point their fingers at us and I don’t blame them, they are frustrated too,” Lindy said. “But if somebody comes in with their Discover card that’s a 3 percent fee to handle it. Let them do the math. It is a frustrating thing for everyone.”