Utahns race to pumps as prices soar

As threats and rumors loom of even higher gas prices, Utah motorists are racing to the pumps, some panic buying before gas hits $3 per gallon.

"It's fill up today or tomorrow, and we know it's not getting any lower," said Sarah Johnson, a Draper resident who commutes to Tooele daily for work.

Despite the rush, Utah isn't seeing the worst of the gas crunch.

While Utah's gas prices were up to $2.725 per gallon Thursday, nationwide prices averaged out at $2.97 a gallon.

Gas prices jumped 35 cents to 50 cents a gallon overnight in some areas, pushing to more than $3 a gallon after Hurricane Katrina shut down 90 percent of oil production in the Gulf of Mexico.

"It's amazing to see the level of devastation. To put it in perspective, just one of those refineries that is out of commission is larger than all five refineries in Utah combined — and there are numbers that are not operational," said Lee Peacock, president of the Utah Petroleum Association.

As gasoline prices surge, sporadic shortages are spreading. Supplies ran dry at a small but growing number of gas stations across the country — mostly on the East Coast and the Midwest.

Soaring gasoline costs even prompted thousands of complaints Thursday to federal officials about alleged price gouging and demands by some members of Congress for an investigation of gasoline markets.

"The good news," Peacock said, "is that there is no constraint of supply here in Utah or the Intermountain West. The refineries are operating at full capacity. . . . The bad news is, many markets draw on supplies from the Southeast, such as the Midwest and even into Colorado. They have found it economical to come to Utah and buy supplies from here. Really, the bottom line is, we're not insulated from the price effects."

This summer, Utah refineries have operated at about 96 percent — a rate Peacock says is tremendous in the industry. Most of Utah's gas comes from Utah, Wyoming and Canada, but Peacock says demand makes the local market volatile.

Richard Peterson, Flying J's vice president for supply, distribution and marketing, said demand is severe. The company was already operating at full capacity, but the hurricane caused a situation Peterson says is unlike any he's seen.

"The system throughout the United States has been strained, and everyone is doing all they can to run as much product, but the demand is still strong," he said.