Russian invasion of Ukraine has drivers facing higher prices at pump
Hayden resident Brian Ward took a moment to reflect on the price of gas as he filled up his wife’s car at the Kum and Go on the west side of Steamboat Springs this week.
The cost to fill up the tank has continued to rise over the past few days with the average price of a gallon of gas in Colorado going from $3.42 last week to $3.91 this week. For Ward, it meant paying $3.99 a gallon.
“I’m fortunate that I’m not filling up my diesel,” said Ward, who normally drives a Volkswagen TDI that gets close to 50 miles a gallon. “It’s not like I like to pay this much, but I’m aware of the prices.”
While the Volkswagen gets better mileage than his wife’s car, the cost of diesel is even higher at $4.69.
“The commute is part of the calculation,” Ward said. “I live in Hayden because I can’t afford Steamboat, but I have a good commuter car because of the drive.”
Ward will have to keep a closer eye on his budget because of the rising costs of fuel, but he remains optimistic prices will stabilize, and maybe even fall.
Across the way, Stephanie Moore was also filling up her small SUV. For her, the higher prices were not unexpected.
“I saw it in the news, and they said it was going to affect gas,” Moore said of the Russia-Ukraine war. “Honestly, I think if this is a stand against Russia, then we just have to pay. … It is what it is, and there’s a reason behind the higher price.”
The price of gas in Steamboat Springs on Wednesday, March 9, ranged from $3.79 a gallon at the Kum and Go on Anglers Drive up to $4.39 at the Conoco at 1450 South Lincoln, as well as the station at 10th Street and Lincoln Avenue. Several other local gas stations were at $3.99.
“I thought that we probably would try and book flights now before the prices of flights go up,” said Moore, who was unsure if the higher cost of gas would change her driving habits. “I think if prices get above $5 or $6 a gallon, we probably would not do as much camping in the summer.”
Skyler McKinley, regional director of public affairs for AAA, said drivers in Steamboat and across Colorado should expect prices to continue to climb.
“Colorado’s gas prices are verging on record highs,” McKinley said. “Certainly, service stations in the Yampa Valley are already going to be well north of $4 a gallon, just like they were well north of $4 the last time we hit records.”
McKinley said the high demand of crude oil is pushing the prices higher across the nation after the global market’s response to Russia invading Ukraine.
McKinley said President Joe Biden’s decision to ban the Russian imports of oil, liquefied natural gas and coal was a bold statement, but it is not likely the cause of the most recent increases, because the U.S. only imports 3%-4% of its crude oil from Russia.
“It’s a historic gesture, certainly,” McKinley said. “I think it speaks to the gravity of what’s going on … (but) most major producers and distributors and refiners were done buying Russian oil weeks ago.”
The most recent increases, he said, stem from a spike in oil prices, which is a function of the fact that Russian oil has not been on the market.
“The variations between last week and this week, and there have been increases, are starting to be factored into what we pay at the pump, but there is that lag,” McKinley explained. “Folks have boycotted Russian oil, and the sanctions announced by the president yesterday relate to that, although, they probably will not move the needle significantly given that U.S. buyers have not been buying Russian oil.”
He said the increased fuel prices are likely to continue fueling inflation, as the increased cost of transportation will be absorbed by customers at places like the grocery store.
Municipalities are also having to cope.
“When we’re preparing our budgets in July and August the year before, we have to guesstimate what is going to be the fuel escalation,” said Steamboat City Manager Gary Suiter. “We’ll put something in the budget like 5%, or something like that, to make sure that we’re covering for some escalation.”
However, there was no way city officials could have anticipated this spike, or that there would be a war in Ukraine. As a result, Suiter said, Steamboat Springs City Council may need to approve a supplemental appropriation if the higher fuel costs persist.
“It does impact the cost of operations; it does impact our budgets,” Suiter said. “I’m sure this morning the cost of hauling our snow, with all of the graders, and dump trucks, and loaders and everything else we have out there, it’s going to cost more.”
Stephanie Jueau, Steamboat Springs School District’s director of finance and operations, said the school district has $85,000 budgeted for fuel on an annual basis and is tracking in line with that.
She believes the district is in good shape, and the addition of a new electric school bus this year, along with six more scheduled to join the fleet in 2022-23, should help with the fuel costs.
“With three months in the school year to go, we should finish the year very close to budget,” Jueau said.
However, regular drivers might not be so lucky. McKinley said the changing price of crude oil is likely to take consumers on an uncertain ride into the summer.
“There are some reasons to be optimistic, but I think there’s so much uncertainty, given the historic nature of the conflict in Europe, that it’s hard to say prices will go down,” McKinley said. “I think the safer bet is to expect prices will stay high through Labor Day.”
To reach John F. Russell, call 970-871-4209, email jrussell@SteamboatPilot.com or follow him on Twitter @Framp1966.
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