Yet there is no one scoundrel reaping un-toward profits while Utah consumers pay the fourth-highest prices in the country.

Instead, there are a number of reasons that Utah prices have failed to drop at the same rate as the rest of the country, leaving residents paying an average of $2.73 a gallon, while consumers elsewhere pay as much as 70 cents less.

Among the biggest factors are our own prosperity and appetite for motor fuel.

Strong demand goes a long way to help explain why Utah refineries were slow to let their wholesale prices fall, even as crude oil prices in recent weeks plummeted. It also helps explain why some of the state's retailers, who normally make a profit of 6 to 8 cents on each gallon of gasoline they sell, have doubled their profits in recent weeks and were reluctant to cut prices.

Utah consumers incensed at high gas prices need first to look at their own fuel-buying habits, said Ken Stern, managing director of FTI Consulting's Energy Group in New York.

Sure, some families are struggling with high gas prices and cutting back.

Scores of others, though, keep on driving those Suburbans and logging the same amount of miles. Why? Utah has one of the highest rates of employment growth in the country, and our economy arguably is hotter now than it has been in the past decade, creating a feeling of wealth and financial well-being among many residents.

"When people are feeling good about themselves and their financial situation, that provides somewhat less incentive to do something about higher gas prices," Stern said.

In fact, Utahns consumed an all-time high of 25.5 million barrels of motor fuel last year, up from 24.7 million barrels in 2004, according to the Utah Geological Survey. Energy experts predict higher consumption this year.

With demand high, those involved in supplying gasoline - refineries and retailers - have little motivation to drop prices quickly.

"Is there some price-gouging at the pump going on right now? I believe there is," said Zions Bank economic consultant Jeff Thredgold. "But it is a legal and a logical economic reaction to high demand."

Like Thredgold, U.S. Bank economist John Mitchell attributes the "stickiness" in Utah's gas prices to the state's economic strength. More people are moving into Utah in search of their share of the state's prosperity. "More people and more cars put upward pressure on demand for gasoline," he said.

Need further evidence?

The three states with the strongest economies - Utah, Idaho and Nevada - have the highest gasoline prices, Thredgold said. Three of the weakest states - Ohio, Indiana and Michigan - have much cheaper gas.

But a strong economy, and high demand, is only part of the picture.

Another big factor is Utah's relatively isolated market. The state has five refineries, all in the North Salt Lake area. They provide almost all of the gasoline burned in the state. Those refineries are fed by two pipelines that bring crude oil from Canada, Wyoming and Colorado.

Over the long run, Utah's gasoline prices mirror the national average, but they often react more slowly to price changes in the rest of the country, primarily because Utah gasoline supplies aren't directly linked to the rest of the nation. Unlike most states, Utah doesn't have direct access to the massive refineries along the Gulf Coast or in California.

That can be good for Utahns during times when production in those areas is disrupted. It can be bad for Utahns, like it is now, when those regions are swimming in excess crude and gasoline.

Last year, while national prices were skyrocketing in the wake of the devastation caused by Hurricanes Katrina and Rita, Utah's prices barely responded. In early November 2005, when national prices climbed to around $2.92 a gallon, Utah motorists were filling up for $2.32.

Yet in recent weeks, the price gap between Utah and the rest of the nation has widened to one of the largest margins in the past five years, leading to outrage among consumers who hear of friends and family in other states topping off their tanks for around $2 a gallon.

Adding to the outrage have been statements from representatives of Utah's refining and retailing industries. They have asserted, to much derision, that Utah stations were waiting to use up higher-priced gasoline in their storage tanks before selling less-expensive fuel at lower prices. They've also offered up vague statements such as, "That's just the way Utah's market works."

Retirees Jan and Mike Bingham, of West Jordan, have been affected and frustrated by Utah's high prices. The couple, who travel in a 29-foot RV towed by a 3/4 -ton diesel truck, cut their travel this summer by half.

"We also were going to take a nice trip, but we canceled it," Jan Bingham said.

Their concern turned to outright anger after hearing Lee Peacock, of the Utah Petroleum Association, and John Hill, of the Utah Petroleum Marketers and Retailers Association, explain their views during a public meeting conducted at the request of Gov. Jon Huntsman Jr., who recently ordered an investigation of the state's high gasoline prices in response to public outcry.

"What they said was such a joke," Jan Bingham said. "They didn't back up what they said with any statistics, any facts or any sensible explanation."

Huntsman's chief gas price investigator, Francine Giani, was skeptical of those explanations as well. Although she seems close to concluding there has been no "price fixing," she does believe there has been some "price-gouging."

Consumer Steve Baker, of Salt Lake City, is wondering if the state's investigation is playing more of a role now in the declining prices than market forces. "Gasoline is as much a necessity as electricity or natural gas, and you can bet that if Rocky Mountain Power, or Questar, were doing this, there would be immediate action."

He added, "I honestly believe that we're not going to see any long-term relief until someone gets their hand slapped."

Although the state's investigation is focusing on why Utah prices are so high, there is another perspective. Namely, why are prices so much lower elsewhere?

And that answer centers on declining demand nationally.

In areas of the country with weaker economies, motorists are more likely to reduce consumption by making simple lifestyle changes - taking public transportation, car pooling or reducing the number of vacation days spent driving the highways.

The U.S. Energy Department reported last week consumption nationally fell 4.1 percent in the two weeks ending Sept. 15. Coupled with that sluggish demand was a significant increase in supply of imported, refined gasoline flowing into the East and Gulf coasts.

In recent months, refinery operators in the Caribbean and Mexico shipped large quantities of refined gasoline into the U.S., said Keith Debus, chief market strategist for Drexel Financial Group in Salt Lake City.

"A lot of product came in on the Gulf Coast. And if you look at those states where gasoline costs the least, they're all connected to refined product pipelines out of Louisiana," he said.

Utah isn't getting much of that cheap gas - not directly anyway.

There is only one pipeline bringing in refined gasoline into Utah, and it runs out of the Sinclair Oil refinery in Wyoming into the Salt Lake Valley.

Utah "jobbers" - companies that purchase fuel at wholesale prices from refineries and deliver it to the state's retailers - have taken advantage of the lower wholesale prices available outside the state, helping push gas prices lower.

For several weeks in August, when the wholesale gasoline prices at Utah's five refineries were peaking, Mark Walker, of the Lindon-based Walker Oil, was sending trucks to New Mexico and Las Vegas to pick up product.

"It was the only way we could offer customers prices that were competitive with the big retailers, the Costcos and Sam's Club," said Walker, whose company operates 23 retail outlets, along with supplying other retailers.

Ultimately, Utah has too much competition among retailers for gas prices to remain high for long.

After peaking at $2.99 on Aug. 21, gas prices in Utah fell to an average of $2.73. That's still more than 40 cents higher than the national average of $2.33 per gallon.

Retailers, however, aren't the only ones who have made extra money in recent weeks.

Crude-oil refineries typically make an average profit of 4 cents for every $1 worth of gasoline they sell, according to the American Petroleum Institute. So in mid-August Utah refineries that were charging a wholesale price of $2.42 cents for unleaded regular gasoline were making about 10 cents a gallon.

With the wholesale or rack price for gasoline in Utah now below $2, the state's refineries can be expected to be making around 8 cents profit on each gallon they sell.

But gasoline profit margins are eroding each day in Utah. Competition is pushing prices lower by pennies, nickels, sometimes a dime a day at individual stations.

Consumers ought to take comfort in the fact that in the coming weeks, prices will continue to fall, said Stern at FTI Consulting's Energy Group in New York.

Retailers may be "taking advantage of the situation" now, but it is a free-market environment, he said. "It can't last."

steve@sltrib.com

lesley@sltrib.com

Why does our gas cost more?

Robust Economy

Utah has high employment growth, rising wages and increasing home prices, creating a feeling of financial well-being. Short term, we are less likely to cut back on gasoline consumption, even as prices rise. Consumption is up, while demand is flat nationally.

Demand down nationally

Gasoline consumption nationally fell 4.1 percent in the two weeks ended Sept. 15. Reduced demand, coupled with a flood of imported gasoline along the East and Gulf Coasts, has helped drive down gas prices sharply in other parts of the country.

Isolated market

Five refineries in the North Salt Lake area provide almost all of the gasoline consumed here. Working near full capacity because of high demand is creating a scenario that is working against Utah's consumers but at other times favors them.

It's all relative

Utahns don't always pay more for gas. Earlier this summer, we enjoyed some of the lowest gas prices in the country. Last year, while national prices were skyrocketing in the wake of Hurricane Katrina, Utah's prices barely ticked upward.