From Deseret News archives:

Gas prices drop below U.S. average

Published: Monday, Dec. 11, 2006 11:05 p.m. MST
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"We need more refined product," Hill said. "If we had a pipeline with refined product coming in, it would increase the supply and affect prices. It should bring us more in line with the national average and probably below it."

Hill said that demand for gasoline in Utah has increased roughly 3 percent a year over the past 15 years.

"We're going to continue to have tight supply if we don't get more product," said Hill, who added that a pipeline from Texas or California could help solve the problem.

In the late 1990s, such a proposal was considered, according to Lee Peacock, president of the Utah Petroleum Association. The pipeline, connecting the Gulf Coast to the Wasatch Front, would have offered more refined products.

"It didn't happen," said Peacock, who recalled that the company offering to build the new pipeline ultimately decided it was not economical.

Kendall Oliphant, director of operations for Salt Lake-based Thredgold Economic Associates, said Utah's gasoline prices are affected by a multitude of market forces, but he said he is unsure why prices were lower at the beginning of this year, only to rise to record levels this past summer and fall.

"The basic idea of a free market economy is that everybody acts in their own self-interest," Oliphant said. "Ultimately, things tend to self-correct."


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E-mail: danderton@desnews.com

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