The picture clears a little

Deseret Morning News editorial
Published: Monday, Oct. 23, 2006 7:46 p.m. MDT
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If Utah's gas prices were to drop tomorrow to somewhere near the national average, all the fire-breathing threats from state officials and others would dissipate like dew in the noonday sun.

Which would be unfortunate.

Utah gas prices often have been on the low range of prices nationwide, but recently they have been at the other end of the scale. Today, people here pay more for gasoline than do people just about anywhere else in the nation. And after weeks of state investigations and other probes into the problem, the issue is becoming a little clearer. The state's five oil refineries are making a lot of money, and they are doing it with Canadian oil, rather than with cheaper crude produced in the Uinta Basin.

Secondly, the state is completely unprepared to deal with the situation. Refineries refused to provide the state with any information about their pricing because the state was unwilling to issue criminal subpoenas. And the state was unwilling to do that because there is no evidence that any state law has been broken.

Normally, we would argue strongly against the state having any power to probe into the records of private businesses, absent compelling evidence that a crime has been committed. But the gasoline market in Utah does not bear any resemblance to a competitive field, and gas is a commodity vital to the movement of goods and services, as well as to the overall health of the economy.

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Utah lawmakers have been favorable toward the oil industry to the detriment of consumers. A 25-year-old law, scheduled to sunset next year, prohibits retailers from selling below cost or from engaging in price wars designed to injure competition. Given modern market realities, where grocery stores and convenience stores offer gas as an inducement to come shop, the law makes little sense. It should be erased from the state code, and lawmakers should take steps toward making Utah's refineries a bit more transparent.

There may be no legitimate way to force them to buy Utah crude, but they ought to demonstrate why it is necessary for them to reap profits that, by some estimates, equal $80 million a year on the backs of Utah drivers.

Meanwhile, the current market ought to stand as a further reminder why Americans need to explore alternative energy sources to power their vehicles. The dependence on crude oil empowers ruthless dictators in faraway lands, and it leads to anti-competitive forces closer to home that defy market principles.

Unfortunately, because Utah's gas-price problems are not typical of the rest of the nation such large-scale lessons likely will be lost.

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