Down go gasoline prices

Industry experts predict that gas prices will continue to decrease over the weekend, but if recent trends continue, the drop in prices may not be as dramatic in Utah as in other states.

While Utahns were somewhat insulated from high gas prices after Hurricane Katrina, market forces have created an interesting turnabout: Prices are now higher in the West than most other parts of the country.

On Tuesday, some gas stations in and near Kansas City, Mo., were advertising at $2.19 a gallon. Wednesday, the average price in Minneapolis, Minn., was $2.27, compared to $2.62 in Salt Lake City, according to AAA.

The national average on Wednesday was $2.59, AAA reported.

"It's an interesting phenomenon, because sometimes we're lower and sometimes we're higher," said Lee Peacock, president of the Utah Petroleum Association. "A great deal depends on local conditions of supply and demand. . . . Right now, conditions exist that we're higher."

Utah gas prices are higher than several cities that receive their fuel from Katrina-damaged Gulf Coast refineries, including Missouri. Even Houston, which was impacted by Hurricane Rita, had average gas prices that were only 1-cent higher than the average in Salt Lake City Wednesday.

Peacock said he was unsure why that would be.

"It depends on refinery capacity and utilization," he said. "All our refineries are up and running, but again, it's local market conditions that determine the price. The economy in the Rocky Mountains, especially in Utah, is booming. We're using a lot of petroleum products, and it all adds up to that demand component that affects prices."

But prices are still significantly lower than post-Katrina highs.

USA Today reported Tuesday that the nation's gas prices have fallen an average of 12.3 cents from a week ago. Prices in the Midwest have fallen the most dramatically, at an average of 14.3 cents a gallon from a week ago.

"I'm officially predicting sub-$2 gasoline by this weekend" in some states, Tom Kloza of the Oil Price Information Service told USA Today.

How Utah gas prices will be affected this weekend is unknown.

Over the past month, average prices in the Salt Lake City area have decreased by an average of 18 cents. Prices across the state have decreased by an average of 15 cents.

Post-Katrina highs in Utah were about $2.87, according to AAA. The national high was about $3.05.