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Rising gas prices in CO after refinery shutdown, impacting drivers, petroleum companies

Rising gas prices in CO after refinery shutdown, impacting drivers, petroleum companies.jpg
Posted at 9:29 PM, Jan 06, 2023
and last updated 2023-01-06 23:31:06-05

COLORADO SPRINGS — After months of relief, gas prices in Colorado are inching back up and prices will continue increasing in the weeks ahead. Part of this is because of a temporary closure of the only oil and gas refinery in Colorado.

According to a press release, the Suncor refinery in Commerce City shut down on Christmas Eve because of equipment damage in the days leading up to the holidays.

“Having the state's only refinery shut down is a pretty big supply disruption,” said Grier Bailey, the executive director the Colorado Wyoming Petroleum Marketers Association. “It's not going to get better until the the refinery in Commerce City comes back online.”

Bailey says Suncor provides 35% to 40% of all gasoline and diesel in Colorado. He added that the refinery is the primary supplier for the Grand Junction Rail Terminal, and also provide about 1/3 of the fuel to airports and military bases.

The refinery shutdown is also impacting local petroleum companies like Chief Petroleum in Colorado Springs.

“The impact for us has really been longer wait times at the terminals,” said John Schutz, the VP of operations at Chief Petroleum. “So getting fuel into trucks, and to the end user has been affected.”

Schutz says the longer wait times are because truckers are getting redirected and absorbing demand from the closed terminal at Suncor.

“We're experiencing wait times triple what we've experienced in the past. So where we've had an hour to an hour-and-a-half wait times at terminals, we're experiencing up to five or six hour wait times,” said Schutz.

Earlier this week, Colorado Governor Jared Polis also announced a state emergency plan to help reduce the supply chain risk of gas and diesel fuel. The plan allows Colorado truckers to work more hours and haul more fuel. It also involved streamlined pipeline transporting regulations.

“They deserve a lot of credit for helping to mitigate those prices on families, but it’s going to be hard and those drivers who are driving around, are being asked to do more,” said Bailey.

Bailey also credits those in the industry who are working to keep up with the demand. He said the Commerce City refinery is working with other suppliers to move petroleum from surrounding states through pipelines and rail terminals.

Schutz said Chief Petroleum is now getting fuel from out-of-state markets when needed. The company provides fuel to utility companies, landscape companies and construction companies, and he added, they’re making sure they’re doing what they can so their customers do not run out of diesel or gas.

“There will be no impact as far as supply goes, however there will likely be price increases during the shortages,” said Schutz.

Bailey added, Bailey that because of the refinery shutdown, gas prices will increase for both retail and wholesale, but it’s not a reason to panic.

“A couple pumps that have yellow bags on them, is not a cause for concern, it’s a market reality for the next couple months,” said Bailey.

The refinery is in "safe mode" to allow for inspections and repairs to the damaged equipment. The refinery is expected to return to full operations in March.

The national average for a gallon of gas, hit $3.20. That’s more than 10 cents higher from a week ago. While prices in Colorado remain lower than the national average, the Centennial State is still seeing a bigger price hike. The statewide average jumped up 20 cents over the last week to $3.06 a gallon.

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