From Deseret News archives:

High Utah gas prices blamed on refineries

3 out of 5 facilities reportedly have been down for maintenance

Published: Wednesday, Sept. 13, 2006 11:41 p.m. MDT
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Over the past year, gas prices in Utah have been like a yo-yo, with among the lowest prices in the nation last winter to among the highest in the nation last October, when AAA reported that a gallon of gas in Salt Lake City cost $2.62, compared to $2.19 in Kansas City, Mo., $2.27 in Minneapolis and the national average of $2.59.

Last October, the reason for higher prices was once again pinned on a supply and demand circumstance, according to Lee Peacock, president of the Utah Petroleum Association. Gas prices, he added back then, also depend on a refinery's "capacity and utilization," whether they are up and running and the high demand in a "booming" economy.

Peacock could not immediately be reached for comment on this story.

As Utahns once again wait for lower gas prices, Hill doesn't want consumers thinking that retailers are gouging customers. He describes gasoline vendors as local businessmen and "neighbors" who barely make enough to cover their overhead costs of providing gas to consumers.

"I would hope they're making a penny or two," he said.

Competition with big retailers that provide low-cost gasoline, like Costco or Smith's, doesn't help individually owned gas stations and convenience stores that can't offer gas at near wholesale prices like some of their competitors, Hill said.

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And as the price of gas from refineries to retailers goes up or stays up, Hill said their cost to provide fuel to customers tends to rise with higher credit card fees to the retailer and the additional expense of installing pay-at-the-pump systems to prevent people from driving off without paying for their gas.

"Now you can't survive without pay-at-the-pump," Hill said about retailers. "They're damned if they do and they're damned if they don't in this industry."


E-mail: sspeckman@desnews.com

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