Who’s Really Making Money on Gas in Central MN

Most of us above the age of 16 are drivers in Minnesota and the majority of those above 16 keep an eye on gas prices.  Who is really making money on gas in Minnesota?  That is a question I posed to St. Cloud State Economist King Banaian.  Banaian indicates based on work he's done on the subject, it's the distributors who are seeing the largest profit on gas.  He says local gas stations aren't losing money on gas but aren't seeing the largest profit percentage.  Banaian says local gas stations are making a larger profit margin on snacks and drinks that customers get going inside the store.  He explains the distributor is who is bringing the gas to the local stations.  Banaian explains local stations can't change the price of their gas below a certain amount in Minnesota due to price controls.

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Banaian believes gas prices are coming down in Minnesota in part because the U.S. Government released another million barrels of oil from the Strategic Petroleum Reserve on May 24.  He says the Federal Government is clearly feeling sensitive about the price.  Banaian says another factor as to why this was released could be due to it being an election year.  He says yet another factor is that the U.S. is seeing less oil shipped here from other countries including Saudi Arabia.  Banaian doesn't expect prices to rise or fall much over the next several months due to the Government concerns and how suppliers will react.

The housing market continues to be affected by higher than normal interest rates.  Banaian believes the lack of supply of available homes in conjunction with interested buyers is making many homes easier to sell despite interest rates.  He says the automobile industry has also seen the affects of higher interest rates on auto sales.

If you'd like to listen to my conversation with King Banaian, it is available below.