If crude oil prices stay high and summer travelers take to the road in droves this summer, gasoline prices will continue to soar.
A spokesman for Chevron USA said gasoline prices this summer "all depend on the American consumer."If people travel a lot, gas prices will probably rise, said Jim Huckabee, manager of pricing and supply for Chevron USA.
On the other hand, if people cut their travel down because of gas prices, "prices will stabilize and maybe drop," he said.
Huckabee spoke with the Deseret News from his office in San Francisco Tuesday.
Utah's attorney general has joined attorneys general from Idaho, Oregon and Washington in calling for a federal investigation into recent gasoline price hikes.
The pump price for regular gasoline has gone up 27 cents in most parts of Utah during the last two months.
Attorney General Paul Van Dam said Tuesday he is joining Washington, Oregon and Idaho in asking the U.S. Department of Justice and the Federal Trade Commission to investigate the sudden increase in gasoline prices throughout the Western states.
More specifically, he wants to know why Utah's gasoline prices are higher than Idaho's. Van Dam finds that fact curious, considering Utah refineries supply Idaho stations and Idaho stations have to pay transportation costs.
"We've heard there was a refinery fire. Also, they tell us the oil spill in Alaska has caused a shortage of crude oil that has put the squeeze on refineries here," Van Dam said, explaining the reasons local oil industry officials give for the rise. "I don't know how true any of these are.
The fire Van Dam alluded to was an explosion in one unit of the Chevron USA Richmond refinery in California. The unit is still down, cutting Chevron's total production by about 25 percent, Jim Huckabee said.
Other scheduled refinery shutdowns have also dropped gas supplies temporarily. When storage supplies on the West Coast drop, West Coast companies buy from Rocky Mountain refineries, hiking prices in both places, Huckabee explained.
Huckabee also noted that the cost of crude oil worldwide has risen drastically in the last six months. The increase accounts for about 16 cents of the price hike at the pumps, he said.
The price of Utah's crude oil has followed the international increase. Uintah Basin Black Crude was $12.75 a barrel on Nov. 15, 1988. On April 20, 1989, the cost had jumped 46 percent to $20. The OPEC price for crude is also $20 a barrel.
The increase in crude oil wasn't reflected at the pump until six weeks ago, said Paul Ashton, executive director of the Utah Petroleum Retailers.
Before that, gas stations were absorbing the rising wholesale costs.
"Our office is determined to find out why prices have gone up," Van Dam said. "We need to know if the Alaskan spill is causing our citizens to be ripped-off."
A month go, oil companies were blaming the wreck of the Exxon Valdez for the price hike.
But now OPEC is their favorite scapegoat. "When OPEC establishes quotas and abides by those quotas, it tightens the world supply," said Bill Berghoff, regional manager for Chevron USA.
World supplies are tight and prices are rising in response, Huckabee said.
OPEC has established a quota of 18.5 million barrels a day, he said. That quota is putting the squeeze on countries such as the United States that are heavily dependent on oil imports.
Gas stations are quick to say that they aren't getting rich off of the price increase.
"I'm making less on a gallon of regular today than I was making back when it was 88 cents a gallon," Ashton said.
One station manager was almost distraught over the angry customers. "It's to the point where I hate working here. The price increase makes me angry, too. I haven't had a raise in three years. I make $5.50 an hour working here."
Not surprisingly, no one is willing to say who is pocketing the $8 increase on each barrel of oil.
"I don't think the oil industry is making any money now, despite what you read in the paper or what you may print," Huckabee said.
Ashton disagrees. "I personally believe the big oil companies are loving this. They will use whatever excuse they can to increase profits."
That's what Van Dam wants to find out. He and attorneys general in the other three states want to meet with the presidents of seven major oil companies in Portland, Ore., in the next two weeks.
"We need to ask questions such as what factors have contributed to the increase in retail gasoline prices over the last nine months and are consumers being charged for the cost of the Exxon Valdez cleanup operation," Van Dam said.