The average cost of a gallon of unleaded gasoline in Utah on Tuesday was $2.34, up 11 cents from $2.23 a year ago, travel services agency AAA Utah reported Tuesday. Nationally, prices averaged $2.69, up 41 cents from $2.28 a year ago.
Even though prices are expected to escalate nationally this summer, Utah's motorists may see less of an increase than those in other states.
Why are Utahns enjoying such low gas prices, compared with the rest of the country?
"In Utah, we are an insulated market - we have a pipeline that brings crude oil from Wyoming, and five small refineries in North Salt Lake," said John Hill, executive director of the Utah Petroleum Marketers & Retailers Association, a trade group made up of gas station and convenience store owners. "We're not reliant as much on foreign crude or the Gulf of Mexico as other states are, which provides somewhat of a buffer against some of the turmoil that has gone on nationally - and internationally."
Hill said another factor in keeping the cost down for now is that gasoline retailing in Utah has become much more competitive over the past several years.
Utahns can buy their gas at affiliates of a number of regional and national gasoline companies, as well as at Maverik and Flying J, both of which compete aggressively on price. Warehouse clubs Costco and Sam's Club, which also are known for discounting gasoline, have invested in pumps in the state, as have grocery chains such as Smith's. The latter offers discounts on Smith's-branded gasoline to shoppers who reach certain spending levels.
Hill said gas prices are rising in Utah, but any increases have been smaller than in other states.
Rolayne Fairclough of AAA Utah warns that prices in the state might not remain the lowest in the country indefinitely. She said too many factors impact the retail cost of gasoline for Utah's situation to remain the same in relation to other states over the long term.
"Just a few years ago, gas prices in Utah - and much of the West - were among the highest in the country," said Fairclough, who has been working with AAA's gas-price tracking service for nearly nine years.
Although Utah's prices and increases in relation to other states are not certain, one thing is for sure: Prices nationally - and in Utah - are expected to rise significantly this summer. Some economists believe the increase will be at least 10 cents to 15 cents.
"It looks like we're going to have a long summer of high gas prices," Fairclough said. "There doesn't seem to be anything on the horizon that would suggest prices will come down."
Retail gasoline prices typically rise during the summer months. To make matters worse, the cost of crude oil Tuesday reached a seven-month high on concerns that Iran is flouting U.S. concerns about its nuclear program. Iran is the world's fourth-largest producer of crude oil.
''We are in a market that's mainly driven by geopolitical events,'' said Michael Lynch, an analyst with Strategic Energy & Economic Research in Winchester, Mass. ''The headlines that have been flashing are not good.''
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Bloomberg News contributed to this story.
