Colorado motorists are enjoying a 13 percent decline in gasoline prices from September’s record highs, just in time to help offset the specter of record costs for winter heating.
The statewide average price for self- service regular was $2.66 a gallon Friday, down from the all-time high of $3.07 in early September after Hurricane Katrina disrupted 10 percent of American refining capacity.
High gasoline prices helped drive stunning third-quarter profits announced last week for big oil companies, led by Exxon Mobil’s quarterly profit of $9.9 billion.
A Denver Post investigation last month found that record high gasoline prices were driven by oil refiner profit margins that had more than tripled in the past year. The nation’s top five oil companies – Exxon Mobil, BP, Royal Dutch Shell, Chevron and ConocoPhillips – own 42 percent of U.S. refining capacity.
Those five companies reported a combined $33 billion in third-quarter profits.
The profits stem from strong world demand for energy and from tight supplies that were further aggravated by Hurricanes Katrina and Rita, said Stan Dempsey Jr., president of the Colorado Petroleum Association.
“There’s a demand boom right now in the energy industry,” he said. “The world economy is pretty much hitting on all cylinders, and that’s creating intense competition for petroleum.”
Natural-gas demand also is high, causing near-record prices for the fuel used to heat most Colorado homes.
Xcel Energy is projecting a 34 percent increase in winter heating bills because of high prices. A typical household utility bill – gas and electric – is expected to hit $235 in December, compared with $180 last year.
With the prospect of sharply higher utility bills, motorists at the Diamond Shamrock gas station near East Sixth Avenue and Speer Boulevard seemed happily surprised to pay $2.51 a gallon Friday.
But many still grumbled about the role of big oil companies in the ongoing gas pump sticker shock.
“I know they’re making record profits. Didn’t Shell Oil make something like $9 billion in profits in the most recent quarter?” asked Dan Charogoff, 40, who was driving his employer’s Chess Inc. truck. “As long as we have an oilman in the White House, oil companies will make big profits.”
Chris Gallegos, 38, who owns Mr. Lucky’s sandwich shop in Denver, said he didn’t accept the explanation that gasoline prices rose after recent hurricanes in the Gulf of Mexico damaged equipment and pipelines.
“You notice they’re not raising prices after this current hurricane. People were outraged before,” Gallegos said.
Another driver said she has changed her driving habits in recent weeks.
“It’s frustrating that oil companies are taking advantage of the situation,” said Paulene Meyer, 31, sitting in her Toyota Rav-4. “I haven’t gone hiking a couple of times because I’m out by Lowry, and it’s a good drive to get to the foothills.”
Pump prices make no difference to Amy Hoffner, 30, a Lexus SUV driver.
“I just accept it,” Hoffner said. “I still have to get to work; I still have to run my errands.”
A couple of miles from downtown, Aurora resident Jose Chama, 32, was filling up for $2.49 a gallon at a Conoco station on South Broadway.
“I noticed it’s like 30 cents less here, but this isn’t the cheapest one,” Chama said. “My Mazda MX-6 gets 30 miles to the gallon, but I still check prices.”
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
