Minnesota gas prices linked to 2 local refineries - FOX 10 News | myfoxphoenix.com

Minnesota gas prices linked to 2 local refineries

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MINNEAPOLIS (KMSP) -

With Minnesota gas prices among the highest in the nation at $4.31 a gallon, FOX 9 has learned the problem can be traced to the shutdown of two local refineries.

Two sources confirm the Pine Bend Refinery in Rosemount, operated by Flint Hills Resources, is on a partial shutdown and should be back in full operation by Memorial Day. Pine Bend is responsible for refining half of all the gasoline used in Minnesota.

The St. Paul Park Refinery -- owned by North Tier Energy, which also owns Super America -- was shut down for April and the first week of May for an engineering overhaul known in the industry as a "turnaround." Together, the two refineries are responsible for 70 percent of the gasoline supply in Minnesota.

"This is a perfect storm," said Erith Roth, executive director of the Wisconsin/Minnesota Petroleum Council, a trade group that represents gasoline retailers. "In my 25 years (in the business), I don't remember a phenomenon when five refineries that supply this market were down."

The others include the Calumet Refinery in Superior, Wis., which is undergoing a "turnaround" too, along with two Chicago-area refineries that shut down for maintenance as they shift to a summer fuel blend.

A spokesman for Pine Bend, Jake Reint, would not confirm the partial shutdown, and said he could not for anti-trust reasons; however, he said Pine Bend is currently only supplying "on allocation," which means the refinery is providing gasoline to its regular contractors. Pine Bend normally produces some 330,000 gallons per day, much of it making its way to the spot market. The lack of available gasoline on the spot market has driven up costs for independent station owners.

Consumer psychology may also be contributing to higher prices.

"The public sees prices are escalating and they fill up to save $10," Roth said. "That exacerbates the problem."

Senators Amy Klobuchar and Al Franken are asking the Department of Energy to investigate the Minnesota price increases and to coordinate refinery shutdowns. Refineries can't coordinate on their own because it would be considered collusion, which is prohibited by anti-trust laws.

A gallon of regular costs 70 cents more per gallon than one did a year ago.

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