Motorists nationwide will pay an average of 25 cents more for a gallon of gasoline this summer than they did last year despite above-average supplies, according to a new report from the U.S. Energy Information Administration.
The summer driving season, which began April 1 and continues to Sept. 30, will push U.S. pump prices to an average of $2.62 a gallon for regular gasoline, 10.5 percent higher than last summer's average of $2.37, said the report, which was released Tuesday.
In Utah, regular, self-serve gasoline prices on Tuesday averaged $2.34 per gallon, up 11 cents from $2.23 a year ago but still the lowest of all 50 states, according to AAA's Fuel Gauge report. The national average on Tuesday was $2.69 a gallon.
"When I started this job nine years ago, the Intermountain West was always the highest next to the West Coast, but recently we have been lower than the national average," said Rolayne Fairclough, spokeswoman for AAA Utah. "We do have domestic supplies from Canada and the Wyoming area, and we have our own domestic refining capacity. It may be something to just being isolated. Sometimes it works against us. Right now it is working for us."
Fairclough said she agrees with the EIA report's assessment that gasoline will be more expensive this summer, but she believes the government is underestimating future prices unless inventories rise sharply over the next few weeks.
"Crude oil is staying near $70 a barrel right now," Fairclough said. "With all of the unrest in the Middle East and the new threats with Iran, all these things just keep gas prices high."
The EIA report blamed this summer's high prices on world oil demand growth, geopolitical instability and only modest increases in oil production.
Motor gasoline consumption this summer is expected to average 9.4 million barrels per day, or 1.5 percent higher than the 2005 summer average.
The report noted that total primary gasoline stocks as of April 1 were 212 million barrels, the same level as last year and 5 million barrels above the five-year average.
Rex Tillerson, chief executive officer of Exxon Mobil, said during a March speech in Salt Lake City that he did not know why gasoline prices were rising despite adequate reserves.
Tillerson said his company saw no need for any new refineries, primarily because of capacity expansions that already have occurred in the industry. Refinery output is one of four sources that supply motor gasoline.
The domestic refining industry is expected to be fully recovered by midsummer from the damage caused by last year's hurricanes Katrina and Rita, the EIA report said. But with another active hurricane season possible this year, gasoline prices in the latter part of the summer could soar past the $3 range, as they did last year when the average U.S. price reached $3.06.
In addition, the U.S. gasoline market faces two new challenges: the final stage of the phase-in of the Environmental Protection Agency's new emission standards, which reduce nitrogen oxides and sulfur content of gasoline; and the phase-out of methyl tertiary butyl ether (MTBE) from gasoline in 2006.
All Utah cities surveyed by AAA experienced increasing gasoline prices from March to April, except Vernal. Moab saw the greatest one-month increase at 10 cents for an average price of $2.51. Logan saw the smallest increase at 3 cents to its current average of $2.36.
AAA's report focuses on self-serve regular gasoline without regard to its octane level.
AAA Utah surveys a limited number of communities across the state in its monthly gas report. Individual service stations sell gas at both higher and lower prices, sometimes even in the same city block.
E-mail: danderton@desnews.com