Colorado drivers feeling more impact from shutdown of state’s only refinery

Battle over Suncor oil refinery intensifies as state weighs permit renewal,  metro Denver residents demand closure


Only a few weeks ago, OK Energy Today reported how the December shutdown of the Suncor refinery in Colorado, the state’s only refinery, resulted in increased pump prices for drivers in the state. Now the U.S. Energy Information Administration reports the increase has been $1.39 a gallon since the day after Christmas 2022.

The only petroleum refinery in Colorado shut down in late December after sustaining damage from extremely cold weather, and it is expected to remain offline for months to repair, the refinery owner and operator, Calgary-based Suncor, stated.

The refinery outage may tighten the supply of gasoline and diesel in Colorado and, more broadly, the Rocky Mountain region, leading to higher retail prices for both.

From the end of December to February 20, the average retail gasoline price increased 51% in Colorado and 27% in the Rocky Mountain region, according to the EIA’s Gasoline and Diesel Fuel Update, compared with a 9% increase in the United States overall.

weekly retail gasoline prices

On December 24, Suncor shut down its 103,000-barrel per day (b/d) oil refinery in Commerce City, Colorado, just outside of Denver. Suncor announced that extreme cold weather earlier in the month had damaged equipment and that the repairs would require a full shutdown of the facility and delay operations until the end of the first quarter of 2023.

Since December 26, the average retail gasoline price in Colorado increased by $1.39 per gallon (gal) to $4.10/gal, as of February 20. In the EIA’s weekly Gasoline and Diesel Fuel Update, some city and state retail gasoline prices are reported.

According to the Refinery Capacity Report, the Commerce City refinery is the only active refinery in Colorado, the most populous state in the Rocky Mountain region. The EIA estimates that Colorado accounted for 41% of total gasoline sales and 25% of total distillate sales (including both jet fuel and diesel) in the Rocky Mountain region in 2021.

The Commerce City refinery outage means the region must draw from existing regional inventories and transfer petroleum products from other out-of-state refineries. Colorado has greater pipeline connectivity to other U.S. regions than other states in the Rocky Mountain region. So, transfers from the Midwest and Gulf Coast should minimize withdrawals from regional inventories.

petroleum product supply to colorado

Data source: U.S. Energy Information Administration

Rocky Mountain inventories of gasoline and diesel fuel started the year well below the five-year average. Existing low inventories present an additional source of uncertainty for prices in the Rocky Mountain region because withdrawals are likely to continue until production at Commerce City resumes.

Higher prices may stimulate increased refinery operations in Utah and Wyoming to compensate for the outage and backfill production that would have come from Commerce City.