SALT LAKE CITY -- Governor Jon Huntsman Jr. has directed the Utah Department of Commerce & Utah's Energy Advisor to probe the ongoing high cost of gasoline in Utah, which he termed as remarkably high.
Nationally, gasoline prices have been steadily declining over the past several weeks; however, Utahns continue to pay some of the highest prices for gasoline in the nation, he said.
Our current market price reflects a similar trend shown earlier in the summer when local prices were below the national average, said Dr. Laura Nelson, [image-nocss] energy advisor to Huntsman. We are reviewing the current market and expect our market will continue to stabilize in the Intermountain West.
The governor has directed Nelson and Francine Giani, executive director of the state Commerce Department, to work together with the parties involved in establishing gasoline prices in Utah.
Other states have not taken extraordinary steps to review the industry, but are experiencing price declines now, Giani said. But we will be vigilant in protecting Utah consumers and actively monitoring prices statewide.
Nationally, gasoline prices were at $2.55 a gallon on Friday, added a Daily Herald report. In Utah, the price of a gallon of regular unleaded was at $2.92 on Friday, down from a record high of $2.99 on August 21, according to data from AAA Utah. In the Provo-Orem area, gasoline prices were at $2.90 a gallon on Friday, down from $2.94 a month ago.
Sticker shock over Utah's gas prices have prompted calls for the Governor's Office to investigate whether gasoline prices are being manipulated by the oil industry, the report said.
We've had numerous calls throughout the week from small business owners, and Utahns who'd been traveling in other states and are shocked by the high gas prices in Utah, Mike Mower, spokesperson for the Governor's Office, told the newspaper. Motorists in Iowa, for instance, are paying $1 a gallon less than Utah drivers. Is it refinery capacity or market undersupply? We're conducting a probe to determine whether further action is needed to make sure gasoline users in Utah are treated fairly, and that there's no market manipulation. It's our responsibility to bring those involved in setting gas prices to the table to get answers.
The Governor's Office first launched a probe into possible gasoline price gouging a year ago in Utah in the aftermath of Hurricane Katrina, but didn't find any evidence of price manipulation, the Herald said.
We're talking to people responsible to find out why Utah gas prices haven't dropped as much as other states. We haven't put together a conclusive list yet, but we want constructive meetings with the Utah Petroleum Marketers Association, the antitrust division of the Attorney General's office, the division of Consumer Protection, AAA Utah and jobbers from refineries, Mower said.
Wholesale gasoline prices have dropped 14 cents in the last week. The trend is clearly downward. But the price drop in Utah is slower than the rest of the country because we were already well below national average prices for most of summer, Lee Peacock, president of the Utah Petroleum Association, told the paper.
Among reasons cited for Utah's high gasoline prices is exceptionally strong demand due to a strong local economy, which is growing at three times that of the national economy, he said. While Utah gets its gasoline from five refineries in the north Salt Lake area, plus imports from Canada, Colorado and Montana, supply is barely keeping pace with demand, Peacock said.
With U.S. refiners subject to additional clean fuel environmental standards under the Federal Energy Policy Act, the costs associated with implementing new technologies and upgrading equipment for refining gasoline may also be passed on to the consumer, Nelson said. Gas stations here could still be selling gasoline they had bought at higher prices from the refineries, and there could also be a lag in the cost of crude oil refiners had bought and where prices are today, she told the paper. It may take a while for oil prices to catch up with refining costs. But prices will come down.
Responding to Huntsman's call for a gas price probe, Peacock said his industry has been investigated many, many times whenever there were price concerns. And in many cases, it's shown we operate under the laws of supply and demand, and we fully anticipate that's what would be shown again, that it's the marketplace that sets prices, he told the paper.
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