Here’s why gas prices are falling in Minnesota
It’s an early gift for the holidays.
“Anything that makes a difference is certainly welcome,” smiles Chris McDougall, gassing up at a station in St. Paul.
AAA says gas prices have fallen or remained steady since Sep. 19.
The national average is just below $3.25 a gallon for regular — in Minnesota it’s even better, at $3.06 a gallon.
“I think the gas prices are definitely better now than they were, like last month,” Justice Jackson says.
She’s right — AAA says nationwide, regular gasoline is now 32 cents a gallon cheaper than a month ago.
“It was kind of nice that the drop in prices happened before the Thanksgiving holiday,” says Dave Vang, a finance professor at the University of St. Thomas.
Vang says it’s about supply and demand.
He notes the price spike during the switch to winter-blend gasoline is now over and that American oil production has hit an all-time high at more than 13 million barrels a day.
“With things going on in the Middle East, the entities in the supply chain kind of anticipated this, so they kind of started to increase their inventories,” he says.
Vang also says things could change by December — that if many more people begin driving and gas consumption rises… or if there’s a major world event.
He says some good news is that some suppliers have enough inventory for prices to remain relatively stable for the next month or so.
At the St. Paul station where McDougall and Jackson were buying gas, the price was $3.18 a gallon.
But in some places in the metro, prices are lower.
Vang says that inflation also has a role in all of this.
“People are spending a lot less,” he explains. “One statistic said 60% of households are living paycheck to paycheck. People have become more cautious about how many trips they’re doing with their cars. That’s been reducing the demand for gasoline.”
McDougall says in these post-pandemic times, he’s been driving less — and spending a lot less for gas.
He notes he used to commute from the Minneapolis home to Mendota Heights and Burnsville, spending about $100 a month for gas.
Now, he says, both he and his wife spend a total of $50 a month. “Good to know things are happening at last,” he says. “I’m working from home and basically driving my daughter to daycare is the only driving I do, so not buying a lot of gas.”