Gasoline prices have fallen for the sixth straight week, despite a recent surge in oil prices and the threat of war near the world's strategic oil supply becoming more serious.
The average price for unleaded regular Friday in Salt Lake County was $1.13 per gallon, down 9 cents from last week. In Utah County the average was $1.28 per gallon, just one cent lower than last week.But the fall in pump prices has lagged behind plummeting wholesale prices that have dropped in recent weeks to the levels of late July, when retail gasoline cost an average $1.06 a gallon.
No such delay in reconciling retail with wholesale prices occurred in early August after Iraq invaded Kuwait. Oil companies feared shortages would result from the Persian Gulf crisis. Industry speculation of imminent war cutting gulf supply lines caused oil prices to hit record highs, and gasoline prices quickly followed suit.
But Saudi Arabia pumped an additional 2 million barrels into the market, alleviating fears of a shortage and sending oil prices back down, while gasoline prices have slowly reacted to the fall in crude prices.
Now war and a resulting oil shortage appears more certain than four months ago. But a similar scenario of soaring fuel prices hasn't taken place yet."The key is Saudi Arabia, the largest OPEC producer," said Chevron spokesman Hugh Dickey. He explained the Saudis control a strategic supply that stabilized prices and can continue to do so if it isn't jeopardized in a war.
And the public outcry against the petroleum industry gouging consumers may have caused oil companies to reconsider reacting too quickly to speculation of shortages.
"Oil companies have taken a beating in the press because of fourth-quarter high profits, so oil companies may be slower to raise prices as quickly as they did in August," said Gerry Tedrow, executive director of the Western Petroleum Marketers Association.
On Friday, oil for delivery in February closed at $27.71 a barrel, up 45 cents, but below the day's high of $28.90.
Another factor contributing to declining gasoline prices is slack seasonal demand, officials said. Historically, demand for gasoline drops during the winter months compared to summer, when motorists are traveling more.
But that doesn't mean oil and gasoline prices won't rocket to record highs if war breaks out in the Persian Gulf. Oil prices dropped to the lowest point in four months Thursday while Secretary of State James Baker met for six hours with Iraqi Foreign Minister Tariq Aziz. But immediately following Baker's bleak assessment of the meeting, oil prices shot up more than $7. The day ended with the price of a barrel of crude oil settling at 9 cents higher than the day before.
So will prices go up, down or stay the same as the Jan. 15 deadline approaches for Iraq to pull out of Kuwait or face a military confrontation?
"Good question, I wish I knew the answer," replied Dickey.
"It's a guessing game," said Tedrow.
"I heard on the radio that gasoline will go up to $3 a gallon. But I am not going to speculate" on pump or wholesale prices, added Randall Couch, Amoco's Salt Lake refinery manager.
Librarian's note: The gas price charts from the Jan. 11 Metro Edition and Jan. 11 Utah Central Edition have been combined and appear in this story as one Chart.\ *****
Here's a sampling of prices for regular unleaded gas in Salt Lake and Utah counties as of Friday morning
SALT LAKE COUNTY
163 W. North Temple 1.189
1699 W. North Temple 1.169
3991 W. 3500 South 1.169
2716 W. 4700 South 1.129
4326 W. 5415 South 1.109
4783 W. 6200 South 1.129
3985 W. 7800 South 1.129
1700 W. 9400 South 1.129
11500 S. Redwood Road 1.119
1287 W. 12600 South 1.119
1350 S. 106 E., Fruit Hts. 1.199
425 N. 800 W. Centerville 1.219
390 N. 500 W. Bountiful 1.199
1501 S. Main, Bountiful 1.199
742 W. 2600 W. Wds. Crs. 1.219
800 N. State, Orem 1.299
1100 N. 200 West, Provo 1.269
410 S. Main, Springville 1.279
900 W. Center, Sp. Fork 1.299
720 S. 100 West, Payson 1.299
Salt Lake County
Average price last week=1.221 Average price this week=1.139
Average price last week=N/A Average price this week=1.207
Average price last week=1.297
Average price this week=1.289