Utah gas prices No. 1 in lower 48

SALT LAKE CITY — Gas prices in Utah, after federal and state taxes are subtracted, have remained the highest in the lower 48 states for the past 92 days.

"That's a full quarter of a year," Rolayne Fairclough of AAA Utah told the Transportation Interim Committee at the Legislature on Wednesday. Fairclough has been tracking the price of gas in Utah for the past 13 years.

The November 2009 explosion at the Silver Eagle Refinery in Wood Cross has had an impact on the state's gas supply, said Lee Peacock, president of the Utah Petroleum Association.

Utah does not have access to cheap oil from the Gulf of Mexico and the Pacific coast because there are not pipelines from those sources. The oil refined in Utah is piped in from Wyoming and Canada, although the amount from Canada has decreased as local refineries have been investing in equipment to refine the waxy, highly paraffinic crudes from eastern Utah. The wax in Utah's oil requires that it be trucked in, Peacock said.

And unlike Denver, which can get oil from large Midwestern refineries when there's a hiccup in the local refinery system, there are not pipelines from the Midwest to Utah, which means the state is dependent on small local refineries.

Utah doesn't enjoy the economies of scale that motorists in larger states enjoy. Utah refineries produce 3.6 million gallons of gasoline each day and 1.9 million gallons of diesel. In comparison, Peacock said, California refineries produce 46 million gallons of gasoline and 9 million gallons of diesel each day.

But don't expect any new refineries to be built.

"Refining nationwide has been a really crumbling business," Peacock said. "Refineries are shutting down. There is a complex series of uncertainties with renewable fuels, climate change and all the questions around carbon pricing; no one in the country is building more refining capacity."

Peacock said that while Utah has more seasonal peaks and valleys in fuel prices than other states, over the long term, gas prices tend to be near average.

Rep. Marie H. Poulson, D-Cottonwood Heights, said that in her neighborhood, there are three Chevron stations with different prices, fluctuating as much as 12 cents from each other.

Stations are locally owned and determine their own prices, said Dave Davis, president of the Utah Food Industry Association and the Utah Retail Merchants Association. When prices at the refineries increase, station owners make a tough choice over whether to increase prices at the pump or shave their own profit margin.

Each station has contracts that prohibit owners from traveling to a refinery in Colorado, for instance, to buy gasoline, said John Hill, director of the Utah Petroleum Marketers and Retailers Association.

e-mail: lhancock@desnews.com

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