Economy boosting gas price in Utah?
Many residents disagree with official's reasoning
That's the latest reason being offered for the state's near-record gasoline prices. At $2.89 a gallon Monday, Utah's average price for self-serve regular gasoline continued to rank as the fourth highest in the nation, according to AAA's Fuel Gauge Report.
The national average for a gallon of regular on Monday was $2.50.
Lee Peacock, president of the Utah Petroleum Association, which represents Utah's five refineries, said "external factors," namely high local demand for refined products, have kept the state's gasoline prices at a premium.
"Our economy right now is really going," Peacock said. "People are working. They're traveling. Commerce is robust. People are using a lot of fuel. It has continued to stretch our ability to produce enough fuel even as much of the rest of the country has slowed down."
But many Utahns are not buying that reason.
Mike Adams of Bountiful said he paid $2.10 for a gallon of regular gasoline on Saturday near Cleveland. He was shocked to see Utah's prices still near $3 a gallon.
"It's dropping everywhere but here," Adams said. "They're making as much profit as they can before they get pressure. Then it will probably come down."
"I don't believe we are driving more," Hansen said. "I know I am certainly driving less."
Jeff Thredgold, president of Salt Lake-based Thredgold Economic Associates and an economic consultant to Zions Bank, discounts Peacock's analysis, saying Utah's economy was just as robust in 2005 and early 2006, when the state's average gasoline prices ranked near the bottom nationally.
In fact, Utah's average gasoline prices were the lowest in the nation in December and January, according to AAA.
And the finger-pointing is not only coming from angry consumers. Industry officials also appear to be blaming each other.
Mark Walker, vice president of Walker's, a Pleasant Grove-based gasoline marketer with 23 stations across the state, said Utah refineries should have been dropping their so-called "rack prices" two months ago.
"They held on to those prices as long as they could," Walker said. "The refiners in this area did not move fast enough when the markets around them were moving and dropping."
But Peacock said Salt Lake City's "rack prices" over the past 12 months have been lower on average than other nearby markets, including Denver, Las Vegas and Pasco, Wash. The rack price does not include taxes or freight costs.
Peacock said Salt Lake's median rack price in the past 12 months was $1.97. Denver was $2. The median in Las Vegas was $2.14, and in Pasco, Wash., it was $2.05.
You can be the first to comment on this story.