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Every day at 5 am, Chris Huiard gets up and figures out how much you’re going to pay for gas.
He looks at prices he got from his suppliers the night before, checks prices on the New York Mercantile Exchange, and looks at what the competition is doing. Then he calls his stations and tells them what numbers to put up. Sometimes, he lets his 6-year-old say the new price.
In Oregon these days, that number is about $4.60 a gallon.
Huiard is a vice president at Space Age Fuel, which operates 23 gas stations in the Pacific Northwest. He’s been pricing gasoline for 15 years, and he’s never experienced anything like the spike in the past two weeks.
“I’ve never seen the price go up 70 cents in a week,” Huiard says. “It’s just up, up, up.”
Contrary to what you might think, that’s not good news for gasmen like Huiard. Gas prices are driven by oil prices, and oil soared over $100 a barrel late last month and kept going higher, hitting $129.44 on March 8. Refiners are paying more for oil, and they’re passing the increase on to stations. But it’s harder to raise prices at retail, so stations often lose money during spikes.
“Margins on gas aren’t huge,” Huiard says. “You’re at the mercy of the market.”
So who’s to blame? Right now, it’s Vladimir Putin. Russia is the world’s third-largest producer of oil, and it’s possible the U.S. and Europe will slap sanctions on Russian production, curtailing supply. Even the threat of that has buyers avoiding Russian producers, according to The New York Times, so supplies are tighter than they were when Putin invaded neighboring Ukraine on Feb. 24. The price of oil is up 41% since then, and gas is following it.
Much of Oregon’s gas starts as oil in Alaska, western Canada and North Dakota. Refineries near Bellingham, Wash., turn it into gasoline and put it in the Olympic Pipeline, which runs to storage tanks near Linnton, along the edge of Forest Park. Because oil trades on international markets and can be shipped all over, events in Russia affect the price of gas in Stumptown.
Oregonians already pay some of the highest gas prices in the nation, in part because of taxes atop the federal levy of 18.4 cents. On Jan. 1, the state raised the gas tax 2 cents a gallon to 38 cents. Portland collects another 10 cents a gallon—used to fix the city’s potholes. The average gas price in Multnomah County on March 8 was $4.69, according to the American Automobile Association.
Things are worse in California. On March 3, San Francisco became the first city in the U.S. to average more than $5 a gallon, according to gas price-tracking service GasBuddy.
Gabriel Zirkle, president of the Oregon Fuels Association and owner of 50 stations, says Portland prices are heading that way.
His recommendation: buy today. “If you fill up every day, you’ll do yourself a favor,” Zirkle says. “That quarter tank you buy is going to be more expensive tomorrow than it is today.”
Zirkle stops short of recommending that we fill jugs with gas because, like milk, gas is perishable. After long periods, it degrades and turns into turpentine, he says.
Huiard and Zirkle say Oregonians should get used to paying these prices for gas. Oregon’s new cap-and-trade climate measures are going to curtail supply in coming years, they say. And Vladimir Putin shows no signs of packing up his tanks and rolling back to Moscow.
It might be a good time to buy a bike. They were hard to come by at the height of the pandemic because COVID closed factories in Asia just as Americans went stir crazy and turned to cycling, en masse.
“Things are starting to get better,” says Michael Jellinek, owner of Cyclepath in Northeast Portland. “We have enough parts to make anyone’s bike work now, and we have lots of bikes on the floor.”
Go by bike, indeed.
See More of A Portlander’s Guide to Surviving Inflation Here!