Gas prices jumped sharply at many Minnesota stations this week.
The website GasBuddy reports the average price in the state as of Thursday was $4.44 a gallon, up about 22 cents compared to last week.
Twin Cities gas prices are generally more volatile, according to GasBuddy analyst Patrick DeHaan. DeHaan said the state engages in what he calls "price cycling," where gas stations will undercut prices.
"They'll lower prices, even if the corresponding cost does not go down, they will lower prices to have a lower price than their competition. Once stations no longer have room to continue that behavior — that is, once they've lowered prices so far that they might be close to their cost is when prices make that infamous jump that we saw yesterday,” he said on Thursday.
DeHaan said the longer the Strait of Hormuz is closed, the more Minnesota drivers could progressively see prices rising in the weeks ahead.
But DeHaan said the price spike also reflects issues at refineries in the Great Lakes region. A power outage at a BP refinery in Whiting, Ind., caused it to evacuate, and there have been other disruptions, like maintenance that caused some drivers in Ohio to find empty pumps at several stations, according to WKRC.
"Those problems are so significant that they're also having a leeching impact into areas like Minnesota and Iowa as well,” said DeHaan. “We did start to see gas stations in Minneapolis going up to $4.59 a gallon. Part of that is a small impact of the refining issues in your neighboring region,” he said on Thursday.
Many Minnesota counties are seeing prices higher than the state average, including Martin County in southern Minnesota, which is seeing gas at $4.59 a gallon, according to GasBuddy.
