As oil prices soar, what it may mean at gas pumps in Missouri

While oil prices are not the only drivers of U.S. motor fuel prices, they are primarily responsible for jumps in the cost paid by American consumers at their local service stations, say industry experts.

On Friday, oil reached more than $95 per barrel on the "OPEC Basket" measure, with multiple forecasts of $100 in the days ahead.

While Missouri pump prices still lag the highest prices in the nation, now seen currently in California, Show Me State service stations are also feeling the upward movement.

GasBuddy chief petroleum analyst Patrick De Haan, who has been following petrol prices for 14 years for the Boston-based tech company specializing in gasoline, talked late last week to the Southeast Missourian about the current trends.

In a nutshell, why have prices been rising on our shores?

The U.S. is the top producer of crude oil worldwide, but when No. 2 Saudi Arabia and No. 3 Russia collude to cut production, we're going to feel it when we pull up to the pump. Even if the U.S. drilled twice as much as it's doing now, we're still in a pickle if those two other countries conspire to reduce oil exports. Yes, there are refinery issues in various places in America. In the Corn Belt states, including Missouri, refinery problems help to explain why Show Me State prices are higher than a month ago. By GasBuddy's measurement, Missouri gas jumped from $3.49 to $3.71, a 22-cent increase in mid-September. (AAA on Saturday, Sept. 23, put the statewide price of gas at $3.61.) The good news is, even if crude oil continues to rise in price, when the refinery problems get fixed, Missourians should see decreases.

Where are the refineries experiencing trouble?

A large refinery in Northwest Indiana has been struggling with production for (four to six) weeks. Pine Bend, Minnesota, is a key supplier in the nation's midsection and it's been idled due to repairs. A Sinclair refinery in Ponca City, Oklahoma, went out of production unexpectedly. Refinery outages have been seen all over Texas due to the heat. There's been no shortage of refinery snags over the summer months. However, with the change back to winter gasoline on Sept. 16, the market won't be under as much pressure. Summer gas is more difficult to produce and areas like St. Louis have a different brand of gasoline than outstate Missouri, but with the switch back to winter fuel, a more simple blend with more butane — all Missourians should start seeing cheaper petrol within a couple of weeks even if oil gets more expensive — which seems likely.

There seems to be a wide variety of average prices state to state. For example, nearby Mississippi is consistently lower than Missouri. AAA said Saturday the national average for gas was $3.85; Missouri's was $3.61 while Mississippi was at $3.28, 33 cents cheaper than the Show Me State. California has America's most expensive gas on average at $5.78. Why the discrepancy?

It's complicated. Motor fuel taxes state to state account for some of the difference. But I'd suggest an additional reason. The U.S. is divided into five regions, called PADDs. PADDs stands for "Petroleum Administration for Defense Districts." PADDs help the federal government track energy data across the country. Missouri is in 15-state PADD No. 2 while Mississippi is in PADD No. 3 and California is in PADD No. 5. Depending on what PADD region a state is in, there are different balances of supply and demand. Each region has a certain level of inventory it maintains and they're not the same region to region. These regions go back to World War II. When the inventory in a given PADD gets too low, prices go up. On the West Coast, where prices are highest in America, PADD No. 5 has a lot of refinery issues. California, for example, has its own blend of gasoline and a carbon management program which charges refiners for emitting pollution. That drives prices up. The West Coast does not have a lot of pipelines; it doesn't have the interconnectedness of a state like Missouri, which has a lot of infrastructure, meaning so many different pipelines cross the state. That many pipelines in a state is good for lower prices. California, which doesn't have Missouri's plentiful pipeline network, is more dependent on getting gas from a place such as Texas. Don't forget gasoline requirements vary between states and another factor is the local level of competition. If you're out in the sticks without a nearby competitor, consumers are in worse shape than say, St. Louis, where competition tends to be fierce.

Locally

County gas price averages Saturday (AAA)

• Cape Girardeau: $3.37;
• Perry: $3.34;
• Scott: $3.39.

City price ranges Saturday (GasBuddy)

• Cape Girardeau: $3.29 (cash only) to $3.59;
• Jackson: $3.24 to $3.39;
• Perryville: $3.25 to $3.39;
• Scott City: $3.39 to $3.49.

Diesel fuel in Missouri averaged $4.22 on Saturday, AAA said, up 25 cents in a month's time. One year ago, the heavier weight fuel cost $4.68.

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