Pagosa Springs and Cortez motorists get a slightly cheaper ride than those in La Plata County, but there’s not a simple explanation why.
Durango-area motorists filled their tanks in October for an average $2.53 per gallon, according to AAA Colorado data. On Friday, gas could be found for $2.24 in town, while the most expensive in the county was in Bayfield at about $2.35, according to Gasbuddy.com.
Meanwhile, neighboring Pagosa Springs 60 miles east has prices at about $2.19, and Cortez to the west is also comparatively cheaper with a low price of $2.09.
Petroleum industry leaders say there could be multiple contributing factors to La Plata County’s high price bubble. Durango’s reputation as a tourist destination as well as its affluence could contribute to driving up gas costs.
“The price of property, cost of transportation, local utilities, not to mention the heavy-hitters in the market – all of the things that go into it affect price,” said Mark Larson, executive director of the Colorado Wyoming Petroleum Market Association, which represents fuel retailers.
AAA Colorado reports that Durango’s monthly average unleaded gas prices since the beginning of the year outstrip the cities of Denver, Boulder, Colorado Springs, Grand Junction and Pueblo.
But La Plata County’s prices hardly compare with its neighbor to the north, Telluride, where prices have climbed as high as $2.65, according to Gasbuddy.
Wave Dreher, AAA Colorado spokesperson, said Glenwood Springs and the Vail area usually log the highest prices, given the cost of transportation to bring fuel to those mountain communities is much higher.
La Plata County primarily looks to New Mexico and Utah refineries for its fuel supply, which of course comes with a price tag. Metro areas like Denver have it easier because the city is in close proximity to pipelines.
But that doesn’t explain the local cost difference between the Durango area, Pagosa Springs and Cortez. The cost difference between transporting fuel from the New Mexico refinery near Gallup, for example, to any of the three municipalities is negligible.
“The difference in transporting from New Mexico to Pagosa Springs or from New Mexico to Durango is not a major issue,” Larson said. “The cost is a few extra pennies. The variables in terms of transportation difference shouldn’t be more than a few cents.”
Peerless Tyre Co. at 1990 Main Ave. typically boasts one of the lowest gas prices in the county. This week, the price was set at about $2.25, while its Conoco competitor just across the street was priced 1 cent higher. Asked about Peerless Tyre’s consistently low prices, manager Sammy Denham said little other than the costs are part of the company’s “image.”
Gas stations see a profit of only 10 cents to 20 cents per gallon, and operations with more supply have more flexibility to set the price higher, or lower it to move more volume. Competitors tend to follow suit, or as Larson says, the street sets the price.
“What other industry has the price of the product right by the roadside for everyone to see?” he said. If one station’s prices drop, others are motivated to do the same.
jpace@durangoherald.com
