"The trend upward is definitely a direct result of Hurricane Katrina," Peacock said. "The price of crude oil is set in international markets. We are not insulated from the price of the raw material. We can't isolate ourselves, because if our prices are substantially lower in the Intermountain West than, for example, in the Midwest, it then becomes economical to send trucks from the Midwest to terminals in the West."

While gasoline prices continue to skyrocket, Peacock said he doesn't anticipate that Utah prices will reach the same levels as those in the Midwest.

"Our supplies have not been disrupted," Peacock said, "but the trickle-down effect of people drawing fuel from outside of their traditional marketplace affects all the country."

Nick Snow, managing director of Oil Daily, said oil companies use what is called "replacement cost economics" when pricing oil products.

"If there is an interruption like Hurricane Katrina, it means that supplies may not be readily available," Snow said. "They calculate the cost of replacing those supplies and price what they have on hand at that level immediately with the idea that they are going to have to pay that cost to replace those supplies."

Utah has five refineries and is the endpoint of a major refined gasoline product pipeline from Wyoming. Combined refinery capacity of Utah's refineries is about 170,000 barrels a day, about half of the refining capacity of one refinery in the Southeast.

Ron Planting, an economist with the American Petroleum Institute, said Hurricane Katrina has forced the shutdown of seven refineries in Louisiana and Mississippi. Three separate refineries, Planting said, had been scheduled to restart operations Friday. Those 10 refineries alone, Planting said, account for about 10 percent of the nation's refining capacity.

At least 10 other refineries are running at reduced production.

Even if Hurricane Katrina had not materialized, gasoline prices were already headed above $3 per gallon, according to Peter Morici, a business professor at the University of Maryland.

"Gas prices will be above $3 for many months after the Gulf refineries are up and running," Morici said. "The crisis created by Katrina will only serve to exacerbate the consequences of rising energy prices and of other fundamental shifts in the economy — U.S. manufacturing from automobiles to petrochemicals will be hurt."

Planting said it has been more than 25 years since a new refinery has been built in the United States. New technology, combined with expansion of existing refineries, have increased production levels.

Even so, Peacock said, the country is long overdue in building new facilities.

"The reason we haven't built a new refinery is because the environmental statutes have become so stringent," Peacock said. "The permitting and siting requirements are so stringent that it is not a very economical proposition.

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Contributing: Zack Van Eyck

E-mail: danderton@desnews.com; jloftin@desnews.com