It’s official: Regular unleaded gas prices surpassed $3 a gallon at a handful of Denver stations Monday and inched within a nickel of the unwelcome benchmark at many more.
Prices are expected to keep climbing as the high-demand months of summer approach and production problems restrict supply, experts said.
Denver motorists, who paid $3 a gallon for gasoline briefly in 2005 and again last summer, weren’t pleased Monday.
“This is ridiculous,” said Reggie Wray, 29, of Aurora, who paid $13 for just over four gallons of gas Monday on South Colorado Boulevard.
“Cruising is out these days,” the real estate investor said. “I go where I have to go, and that’s about it.”
The average price for a gallon of regular unleaded gas in Denver was $2.90 Monday morning, according to AAA Colorado. Statewide, the average price was $2.94 at the start of the day, and nationally, it was $2.95.
Several Denver retailers said their suppliers raised wholesale gas prices 8 cents overnight, prompting them to raise prices above $3 a gallon Monday.
“I’m just an independent operator trying to make a living,” said Mark Copeland, owner of the Diamond Shamrock at 1465 S. Colorado Blvd. “Everybody around me is selling for cost. I’m making … 8 cents a gallon.”
The price gain has been particularly surprising this year because it came quickly. In late January, gas prices hit a near two-year low of $2.09 per gallon in Colorado.
Prices rose sooner than normal this spring – and may hit record highs by summer – because of an unusual rash of oil refinery problems nationwide in recent months, experts said.
The U.S. Department of Energy reported last week that national gasoline supplies fell by 2.8 million barrels over the previous week, even as crude oil supplies grew.
Running on empty
In Colorado, some Diamond Shamrock stations have run out of gas recently because of a refinery fire in Texas in February. The usually busy Diamond Shamrock station at Speer Boulevard and East Sixth Avenue was out of all fuel but diesel on Monday.
Valero Energy Corp., which owns the Texas refinery and supplies most of Colorado’s 360 Diamond Shamrock stations, is still bringing the damaged plant back on line. The refinery is operating at just under half capacity and will return to roughly 85 percent capacity by the end of June, Valero spokesman Bill Day said.
“We don’t expect the shortfalls to last very much longer,” he said.
Suncor USA, which operates an oil refinery in Commerce City, produced above capacity during April, despite several power outages, said general manager of supply and marketing Steve Douglas.
Still, Suncor has been bringing in additional gas by rail to meet demand, he said.
Industry experts fear gas could skyrocket above $4 this summer if a catastrophic event occurs to further reduce supplies.
“We don’t have any slack built in to the system now,” said Roy Turner of the Colorado/Wyoming Petroleum Marketers and Convenience Store Association. “All it takes is one little burp and we’ve got problems. … No new refineries have been built in this country since 1973.”
Some see a silver lining in the gas numbers.
“The price of gas in Colorado could be worse,” said AAA Colorado spokesman Eric Escudero. “This is the 26th consecutive week in which the average price of regular unleaded gas here is below the national average.”
Staff writer Greg Griffin can be reached at 303-954-1241 or ggriffin@denverpost.com.
