Salt Lake Tribune
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Supply and demand: Gasoline will cost what we are willing to pay
This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

W.C. Fields said, "You can't cheat an honest man."

The question in Utah these days is, "Can you gouge a wise consumer?" At the gas pump, that is.

The conclusion of a report from the state Department of Commerce is that Utah gasoline consumers have been gouged in recent weeks by retailers who were slow to follow a national trend toward lower prices.

Given that the state has little information about the costs of oil up and down the supply chain, and less power to do anything about it, the only realistic tool available to the consumers of Utah is the same one that's been available to buyers since the days when sea shells and tiger teeth were legal tender.

If it costs too much, don't buy it. Or, when that is not practical, try to get by with less.

The report was ordered up by Gov. Jon Huntsman Jr. in response to a public outcry that retail gasoline prices in Utah were bubbling around $2.91 a gallon in late August, falling to $2.57 just last week. The national averages for the same dates were $2.88 and, later, $2.25.

Of course, nobody demanded a government inquiry when Utah's retail prices were noticeably lower than the national average through most of this year before the spike in August.

Because there is no requirement that refiners or wholesalers report the prices they pay or the prices they charge, the Commerce Department really didn't have the wherewithal to report anything other than the obvious.

Utah and the surrounding territory is an isolated market for motor fuel. While the price of crude oil is largely a factor of world markets, the supply and demand factors that set the retail prices are closer to home.

The state is served by a handful of pipelines and refineries. Demand for their products keeps going up. Most of the retailers who sell gasoline operate on a pretty thin margin, often losing money on gasoline sales and depending on soda pop and snack foods to make up the difference. Any time the market will bear higher retail prices, retailers will charge them.

Barring a complicated regime of price controls - a bad idea - the state is powerless to alter the situation.

The only hope for lower prices is reduced demand. Drive less. Walk more. Take the bus. Buy a smaller car.

The price may still go up. But at least it won't be your fault.

* THE UTAH COMMERCE DEPARTMENT REPORT on retail gasoline prices is available at http://www.commerce.utah.gov/. A survey of gas station prices is online at http://www.utahgasprices.com.

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