[May 19, 2007]

Everyone grumbles, but how many know what goes into fuel prices?

(Post-Bulletin (Rochester, MN) (KRT) Via Thomson Dialog NewsEdge) May 19--What drives the ups and downs of gas prices in southeastern Minnesota?

Why do prices often go up on Thursdays?

Why do prices at gas stations and convenience stores seem to move in lockstep?

Everyone has questions about gas prices, one of the most volatile and punishing facts of consumer life -- when prices jump 20 cents a gallon, you have no choice but to pay when your needle hits empty.

Before gas is delivered to stations in Austin and other area towns, it goes through a complex process that most of us don't think about much when filling our tanks. Each step in that process, not to mention international politics, war and market forces, can contribute to what you pay at the pump.

"I don't think people realize how global the price situation is," says Kermit Watts, owner of the Austin Auto Truck Plaza.

Crude oil from around the world winds up as the gasoline you buy at southeastern Minnesota stations, but most of that oil comes from Canada. It's through pipelines starting there that most crude oil arrives at two refineries in the Twin Cities area.

Those two refineries, one in Rosemount and the other in St. Paul Park, supply a large portion of the gas that's pumped at southeastern Minnesota stations.

From those refineries, gas is delivered to our area in two ways -- by truck and by a distribution pipeline. The Twin Cities refineries supply much of the gas that comes to southeastern Minnesota through that pipeline, which is part of a sprawling system that also carries gas to our area from refineries in places such as Kansas, Oklahoma and the Gulf Coast, according to Bruce Heine, a spokesman for pipeline-owner Magellan Midstream Partners.

The pipelines carry gas to Magellan-owned distribution terminals in Eyota and Mankato, where fuel is mixed and loaded onto trucks before being hauled to area stations.

Watts said his Austin station gets gasoline delivered by trucks from multiple sources: directly from the Twin Cities, the Magellan terminals in Eyota and Mankato, and also from a British Petroleum-owned terminal in Spring Valley. The Spring Valley terminal is supplied by a BP-owned pipeline with gas from a refinery in Whiting, Ind., according to BP spokeswoman Valerie Corr.

But what happens then? How are prices set, why do they bounce up and (sometimes) down -- who's making all the money, and what can consumers do about it?

That's what this package of stories is about. Read on for answers.

We asked: What do you think of gas prices today?

"They are charging whatever they can get, and they are getting it."

-- Jim Samuel, Austin

"We were planning on going to Florida this summer. Right now that's up in the air. We have had to spend a lot of the money we have saved up because when gas prices go up, everything goes up. It gets to be a pain. I'd like to see them go down."

-- Dustin Weber, former Austin resident

"My car used to cost me $15 to fill up. I just spent $35 for 11 gallons. It's ridiculous."

-- Angie Flaherty, Austin

"People still come and buy it. It's the same as normal. People still need to travel."

-- Jessica Vanravenhorst, clerk at Freedom gas station, Austin

"It's too high and (many people) don't have enough money to pay for it."

-- Nicole Jakes, Austin

Compiled by Karen Colbenson/The Post-Bulletin

Copyright (c) 2007, Post-Bulletin, Rochester, Minn.
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