What is causing the sharp drop in gas prices in some Minnesota cities?

HASTINGS, Minn. — Gas prices are thankfully down. The average price per gallon in Minnesota is around $4.50. But parts of the state are already well under $4.

What is causing the sharp drop in prices in some cities? Good question. Jeff Wagner tries to understand what fuels this mystery.

From the M&H petrol station in Hastings to the Holiday station across the street, good vibes travel as fast as fuel.

On the list of Ten Cheapest Gas Prices in Minnesota, six locations are in or near Hastings – in the range of $3.68 to $3.88 per gallon. That’s up to 70 cents cheaper than the state average.

So what’s behind these prices? We spoke with Alfred Marcus, a professor at the Carlson School of Management at the University of Minnesota.

“Generally, I think you’ll find in rural areas, gasoline is a little cheaper than in urban areas,” Marcus said.

This is because urban areas have higher demand, which often leads to higher prices. But that still doesn’t explain the huge discrepancy here.



One of Marcus’ theories is the location of Hastings, which is a short drive from two oil refineries. So why don’t all towns near refineries sell gas for less than $4?

“There could be, you know, kind of a price war going on,” Marcus said.

The competition in Hasting could be fierce. Minnesota law requires retailers to sell gasoline for at least 8 cents more than they bought it – so it’s necessary to make a profit.

“They may also want to attract traffic from other stations,” Marcus said.

The lure of saving on gas is enough to make drivers burn it. Speculation aside, we went straight to the source of the secrecy behind the pricing. Unfortunately, the gas station owners said they were not authorized to comment.

Other Minnesota cities where gas prices have fallen below $4 include Buffalo, St. Cloud and Vermillion.

About Laurence Johnson

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