SALT LAKE CITY — Utah gasoline prices are the lowest in the country after dropping 22 cents, but the relief may be short lived with oil prices over $100 a barrel.
Utah's average gas price dropped to $2.92 from $3.14 in last month's report, AAA said on its website. By comparison, the national average of $3.37 rose 10 cents over the same period.
"Cheaper crude oil in Utah is helping to keep prices at the pumps lower than anywhere else in the nation," Matt Skryja, a AAA spokesperson, said in a statement. "Although Utah's gas prices are the lowest in the country, most consumers across the country have been seeing a steady increase in prices since late last year. The recent gas price increases are largely driven by investors' buying behavior, which is linked to real, perceived, or potential impacts on supply and demand worldwide."
The cost of crude oil determines 77 percent of gasoline costs, according to the Energy Information Agency.
Local petroleum marketers are enjoying the short break, but have to prepare for a coming spike in prices.
"Volume is up," said Scott Wagstaff, vice president of West Valley City-based Holiday Oil. "It's been good over the past few months. My guess is we've hit rock bottom."
Prices have dropped because of a surplus of gas at local refineries, which petroleum marketers, like Wagstaff, purchase their reserves from, said Sam Campbell, director of petroleum operations for Maverik gas stations.
A relief from credit card charges is another benefit from lower prices. Credit card fees are generated as a percentage of sales. As gas prices drop, so do credit card fees because they are based on a percentage, Campbell said..
"That alone will help us decrease cost and lower retails," Campbell said. "It affects a lot."
Now, refineries are starting to warn retailers about a coming rise in prices as those surplus reserves are thinning.
Wagstaff said gas prices can be expected to start rising by next week.
"I don't think we'll see much lower unless the refineries start dropping the cost again," Wagstaff said.
He also said that they will go nine or 10 months either breaking even or losing money on gas until they run into "good months" like the ones we have experienced lately.
Among all states, Hawaii had the highest gas prices last month, reaching an average of $4.03, according to the AAA report. Hawaii is the only state above $4.23 comments on this story
An increase in international demand has cause crude oil price to rise, yielding higher retail prices in Utah.
Crude oil prices rose by 93 cents to $102.24 per barrel. The prices rose after China reported a 6 percent increase in oil imports in December compared to a year earlier, according to CBS News.
That raise in price is what makes the cost relief short and sweet for Utah marketers.
"Consumer demand is better when prices of gas are lower, but unfortunately it's quite temporary with crude oil hitting $100 again," Campbell said. "In the short term, it was enjoyable for all of us."