See gas-price chart on B1.Gasoline prices have inched down a penny or two a gallon from last week, as service stations continue to enjoy the highest profit margins in two years.
At the same time, Salt Lake refiners charge some of the highest - on some days the highest - wholesale gasoline prices in the country, according to figures in a oil industry publication.Service station operators aren't ashamed to admit they are finally making a comfortable profit - about 10 cents a gallon - after years of penny pinching. And they get somewhat testy when accused of gouging consumers.
"We want to live like human beings," said Paul Ashton, executive director of Utah Petroleum Retailers Organization. "We should be able to maintain a decent profit margin. We can't even give any benefits to our employees at the station."
When it comes to charging exorbitant fuel prices, Ashton points to oil refiners lining I-15 in North Salt Lake. He accuses Salt Lake refiners of not only making millions of dollars off oil wells since the Persian Gulf crisis, but of reaping profits on the wholesale and retail gasoline market as well.
In its daily listing of wholesale gasoline prices around the country, The Oil Daily has consistently ranked Salt Lake City among the five most expensive markets in the country for the past two weeks. The prices don't include state taxes and freight charges.
On Tuesday, Salt Lake City's 95-98 cent per gallon range for unleaded regular ranked fifth behind New York, Boston, Philadelphia and Denver. Two days last week, Salt Lake City had the highest wholesale price in the nation, as much as 12 cents higher than Midwest and Gulf states refiners.
Local refiners attribute their dubious distinction to tight supplies of refined products. Chevron, the largest refinery in Utah, underwent extensive maintenance in October, shutting down some facilities and reducing production.
"We had to truck some product in from Reno and Las Vegas," said regional marketing manager Brent Lowe. He noted that Salt Lake City ranked among the lower priced refiners in the West last summer when supplies were abundant.
The Utah Energy Office agrees, saying Salt Lake refiners serve a large area and inventories are historically tight. In its recent report on how the Persian Gulf crisis has affected Utah energy needs, economist Jeff Burke said gasoline inventories have been extremely low, although there is no shortage of Rocky Mountain crude oil.
Despite tight supplies, the wholesale price has decreased by as much as five cents per gallon in the past two weeks, inching up two cents the past two days. But pump prices haven't reflected those fluctuations.
Ashton said service station operators have held relatively steady to make up for losses when retail prices didn't keep up with increases on the wholesale level.
But he added the sustained prices won't stay long if wholesale continues to drop, tempting retailers to lower prices and attract more business.
Also oil companies will use the volatile situation in the Persian Gulf to keep oil and wholesale prices high, Ashton said. "Anything could jump. One shot fired over there (in the Persian Gulf) and we will think $1.35 a gallon was pretty neat."