Utah consumers aren't the only ones reveling in the declining cost of gasoline.

These days, there are smiles on both sides of the pump.

Whenever the cost of gasoline declines, the state's retailers typically make more money than when the price of the motor fuel is rising, said John Hill, state director of the Utah Petroleum Marketers and Retailers Association. "Most people think we [retailers] make a lot of money when prices rise, but that's not the case."

When prices go down, retailers don't have to pay as much for the gasoline they get from refineries, he said. The cost of getting the fuel to the station also goes down, and those credit card fees retailers hate because they're calculated as a percentage of the sale don't take nearly as big of a bite.

So, these days, there is plenty for Utah retailers and their customers to be happy about.

Utahns on Monday were paying an average of $1.62 a gallon for unleaded regular gasoline at the state's self-serve pumps, the 10th-lowest price in the nation, according to AAA Utah. The price is $2.60 a gallon less than what motorists were paying on July 18 when the state's average price reached a record $4.22.

Nationally, motorists are paying an average of $1.72 a gallon.

Normally, retailer's gross profit margins on gasoline -- the difference between the wholesale and retail price after taxes and transportation costs are paid -- are around 12 cents to 14 cents a gallon, said Jeff Lenard, spokesman for the Association for Convenience and Petroleum Retailing, formerly known as the National Association of Convenience Stores. From that gross profit, they have to pay their overhead costs, such as wages and rent. And that often means they end up making only a few cents in profit off each gallon they sell.

"When prices are higher, retailers are almost forced to keep their prices as low as possible to meet their competition and maintain their sales [volume]," said Rolayne Fairclough, spokeswoman for AAA Utah, which tracks gasoline prices throughout the state. "And that can really squeeze a retailer's profits."

It some cases, it can even wipe it out.

"When prices were near their peak earlier this year, some of our retailers were losing 3 cent to 4 cents a gallon," Hill said, explaining the high cost caused the demand for gasoline to decline, leaving station owners unable to pass along all the increases they were seeing in their wholesale costs.

On the other hand, declining gasoline prices also can bolster a store's nonfuel sales, Lenard said.

With consumers able to fill up their fuel tanks for less, they often have more money left over that they use inside the stores for a sandwich or candy bar. Gasoline sales typically generate about 70 percent of a [convenience] store's sales but represent only about 34 percent of the profits that are generated.

"The bottom line is that if a customer isn't buying gasoline at your store, they're not buying anything else," Lenard said. "Normally, just about everything is bad for store owners when gasoline prices are on the way up and good for them when they're on the way down."

Blaine Engel of Lethbridge, Alberta, who was in Salt Lake City on Monday while his wife attended a training conference, said even with gasoline prices down he doubts that retailers are seeing much of an increase in sales volumes.

"It makes sense that they're able to make more money when the price is down," he said. "But right now everyone still seems really worried about the economy, so I don't think you're getting people buying a lot of gasoline."

steve@sltrib.com

Gasoline prices: A snapshot

Utah

Monday's average price: $1.62

One month ago: $2.45

One year ago: $3.07

U.S.

Monday's average price: $1.72

One month ago: $2.28

One year ago: $3

Source: AAA Utah