A pricing spat in Bismarck set in motion a nearly 12-cent price drop for regular unleaded gasoline in the past two weeks, experts say.

And those price declines mean Bismarck gas buyers are paying less per gallon for regular unleaded than Fargo and Grand Forks buyers, according to data from the AAA fuel gauge report.

By Monday morning, Bismarck regular unleaded gasoline trumped both Fargo and Grand Forks:Bismarck-Mandan was running at an average of $2.18 a gallon, Fargo at $2.19 and Grand Forks at $2.20.

On Friday, Bismarck regular unleaded gas prices were already lower than Grand Forks prices by two cents:Bismarck-Mandan was at $2.18 a gallon, and Grand Forks was at $2.20 a gallon, according to AAA. Fargo averaged at around $2.17 a gallon until Monday.

Prices of regular unleaded gasoline in Bismarck averaged about $2.15 a gallon for regular unleaded within the city, and a few cents higher elsewhere, which brings the AAA Bismarck-Mandan average up, said Gene LaDoucer with AAA.

LaDoucer said there was a sharp drop around Nov. 7, when the price went from $2.28 a gallon to $2.19 a gallon. The price dropped again to Monday's low.

"Right off hand, I can't think of the last time Bismarck was lower than both Grand Forks and Fargo,"LaDoucer said. "It would seem to indicate that there's increased competition in the area."

Mike Rud, president of the North Dakota Petroleum Marketers Association, agreed.

"I'm assuming we're just in a gas war here in Bismarck,"Rud said. "There's a couple of stores that started this competition, and it'll continue."

Rud was not sure which stores started the drop in prices.

The average price for a gallon of regular unleaded gasoline in NorthDakota was $2.26 on Monday, according to AAA reports. Nationally, the average price was at $2.22.

Wholesale prices continued to hover just below $1.70 a gallon for regular unleaded in North Dakota, which means profit margins in the Bismarck area tightened with the falling prices.

"This Bismarck price isn't good overall for our marketers right now - this isn't a good situation going into the holidays,"Rud said. "We'd like to definitely see a little more margin in the gas right now."

Pricing on diesel continues to increase, however, with Bismarck staying at least 20 cents above Fargo and Grand Forks prices, according to AAA.

A gallon of diesel in Bismarck was running at $2.75.

In Fargo and Grand Forks, diesel was $2.63 a gallon and $2.53 a gallon, respectively, on Monday.

LaDoucer said all fuel prices may go up nationally for the holidays, based on previous trends.

"A lot of times before busy driving holidays, you would tend to see gas prices move a little higher,"LaDoucer said. "And Thanksgiving tends to be a driving holiday, so prices may move upward a little."

Rud was not sure whether prices in the Bismarck-Mandan market would increase again or continue to drop.

"We're hoping we can stabilize and hold a decent price that our marketers are happy with, and our consumers are happy with,"Rud said.

(Reach reporter Crystal Reid at 250-8261 or at crystal.reid@;bismarcktribune.com.)