By Chris Mannara
Staff Writer
The COVID-19 pandemic has affected numerous things across the country and globe; it has even had an effect on local gas prices.
According to a press release from AAA, as of Wednesday, the national pump price for regular gasoline dropped below $2, specifically to $1.984, marking the cheapest average in four years.
Colorado’s average price as of March 31 falls under the national average price with the state’s average listed at $1.958, according to a AAA gas prices map.
Last week, Colorado’s average regular gas price was $2.051.
Archuleta County’s average gas price was reported by AAA as being $2.235, compared to La Plata County’s average of $2.362.
Montezuma County had an average gas price of $2.431.
However, El Paso County had an average gas price of $1.902; Arapahoe County had an average gas price of $1.848.
Gilpin County had the highest reported average gas price out of the counties surveyed with an average gas price of $2.699.
Elbert County had the lowest reported average gas price out of the counties surveyed with an average gas price of $1.686.
Gas prices within the state have been affected due to COVID-19’s affect on demand and due to international conflicts, Skyler McKinley AAA Colorado’s director of public relations, explained in an interview on Tuesday.
“Demand is absolutely plummeting for a variety of reasons,” McKinley explained.
Demand is low not only just for crude oil, but what citizens see at the pump, he added.
“Crude oil demand is way down because there is not a lot of shipping going on. There is not a lot of airplane traffic going on,” he said. “Separately, we also see low domestic demand for gasoline. People are not driving.”
McKinley noted that this is a good thing due to numerous stay-at-home orders being enacted across the nation.
“Even though that this is the time of year where we typically see demand increase, we’re not seeing it because there’s so many factors because of COVID-19 keeping people away from their cars and not driving,” he said.
Another impact involves a price war between Organization of the Petroleum Exporting Countries (OPEC), largely driven by Saudi Arabia and Russia, McKinley explained.
Russia is not an OPEC member, but is a major producer of crude oil, he explained.
“Those two are really kind of fighting it out in the global crude oil market and, as a result of that, crude is very cheap,” he said.
Price variance
explanation
Typically, on the eastern side of the state, gas prices are below the national average, while on the western side, gas prices are above the national average, McKinley explained.
“It’s a function of two things. Again, demand, more urbanized areas tend to have demand factors that drive the price down. There’s more competition in the markets,” he said. “Also, it’s just where our gas is coming from.”
On the eastern side of the state, gas tends to come up from Texas or come down from North Dakota, he explained.
The western side of the state receives its gas from Utah and California, he explained further.
“There’s just different, smaller dynamics at play in the gas market,” he said.
For example, Montrose County and Mesa County had average gas prices of $1.953 and $1.910, respectively, which McKinley described as “the major urban area for the Western Slope.”
“While in more rural counties, they don’t have that competition that then overrides what we see with the supply side of the market,” he said.
Another factor that affects gas prices is who controls the majority of the market share, he added.
“It all depends on the pull of the market and how much these individual companies are able to negotiate with suppliers,” he said.
