Although there is as much as a 12-to 13-cent discrepancy in gas prices per gallon between Salt Lake and Utah counties, expect that difference to close in the consumer's favor in the next two weeks, according to local retailers.
However, Paul Ashton warns that closing that gap, which he expects may be in the 8- to 9-cent range, may damage many local stations' business. "(Gasoline retailing) is a mean, mean business. You have to be able to show a profit if you want to stay in business."Ashton, who owns several local gas stations as well as serving as executive director of the Utah Petroleum Retailers Organization, said fuel wholesalers have been charging station owners as much as $1.14 per gallon of the unleaded fuel, meaning that many Salt Lake retailers may be selling fuel at less than the cost of what some retailers have to pay for their gasoline.
"It's not a fair business practice. If some retailer down the street lowers his prices, you've got to lower yours or you're not going to pump any gas. However, lowering your price sometimes means that you might not be able to stay in business."
Despite some assessments that the beginning of the Persian Gulf conflict would bring gas-price raises, those did not materialize, although the potential is still there, Ashton said.
"As soon as a Saudi oil refinery gets hit, you can expect a price raise to the $2 range and soon. We're just expecting it. The market is just so unstable now."
The Deseret News interviewed several local retailers, and more than half of the respondents agree with Ashton's assessment. The manager of one Orem gas station and convenience store, who refused to be identified, said the sheer saturation of large retailers - such as those affiliated with oil companies - allows retailers there to be more flexible in their profit margins.
"We're just a small station. We couldn't try to dictate prices for the big boys, or we'd end up losing. However, we'll probably wind up in the same price range here."
Although the state attorney general's office is supposed to be looking into possible gas price fixing in the county, Ashton said an investigation would show that local retailers are staying well within the allowable 6 percent profit margin.
"You need to charge that much to survive, especially with regulations such as those requiring removal of leaking underground storage tanks. That could cost some owners from $50,000 to $80,000, and you've got to make a profit to pay for that."
Brent York, Payson's Fuel America outlet manager, agrees. "It's sad that the retaileralways has to be the SOB or the bad guy. Anybody who thinks there's a profit to be made in the gas business, especially as a small retailer, ought to buy his own station."
The county actually has the fairest gas prices in the state, after a disastrous price war seven years ago that forced some smaller retailers out of the business, Ashton said.
"Right now, it's war in Ogden and South Salt Lake, and several retailers are worried. If it continues in Salt Lake area, we could have the same situation Utah County did a while ago."
As of Jan. 18, average prices per gallon of regular unleaded fuel:
Utah County $1.26.1
Salt Lake County $1.13.9