Low gasoline inventories and a delay in Iraqi oil production are pushing Utah's gasoline prices up to near the record levels of earlier this year.
The average price for a gallon of unleaded regular gasoline in the state increased 8 cents to $1.65 on Wednesday compared with last month, according to the AAA fuel gauge report.
The state's current average is only 5 cents below the highest recorded average price of $1.70, which was reached March 20, just prior to the start of the war in Iraq.
Utah gasoline prices are 17 cents above what they were a year ago and 8 cents higher than the national average of $1.57. Utah's average gasoline prices have exceeded the national average in nine of the past 12 months.
Prices in the combined Salt Lake-Ogden region experienced an 11-cent spike to $1.64 this month. Prices increased to $1.60 per gallon in the Provo-Orem area, a 5-cent increase over July. Vernal residents also witnessed a 5-cent increase to $1.64. Moab prices rose 1 cent to $1.75.
AAA Utah surveys a limited number of communities across the state in its monthly gasoline price survey, and the resulting figures are averages. Individual service stations sell gas at both higher and lower prices, sometimes even in the same city block.
Rocky Mountain gasoline prices are traditionally higher than the national average, said Rolayne Fairclough, AAA Utah spokeswoman.
"The reason for that is because we have these great geographical distances between our markets, so delivery is more expensive," Fairclough said. "And then we don't have the competition out here. We don't have BP. We don't have Shell. We don't have all of those others."
Jacob Bournazian, an economist with the Energy Information Administration, said the Rocky Mountain states have always been isolated from the regular distribution system for U.S. petroleum products.
"You have a finite set of suppliers in that region," Bournazian said. "If prices were to hypothetically spike 20 cents, who's going to rush in there and provide supply to Utah? . . . Let's face it. The southeastern United States, nice proximity to the Gulf where the major production center is, they'll always be the cheapest pricing level."
The national average — which jumped 7 cents over the past month and is up 16 cents compared with the same day a year ago — is being blamed on lower gasoline stocks.
Total U.S. gasoline stocks are down 10.7 million barrels over last year, the result of last year's Venezuela shutdown of exports, Bournazian said.
"If the same amount of gasoline is demanded each week, you're going to make up that shortfall by drawing down on your stock levels for refined products," he said. "By March we saw some of the largest retail price increases in the gasoline market."
The national 2002 average summer price for gasoline was $1.39.
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