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Utah gas 8th priciest in the country, and likely to rise

SALT LAKE CITY — While Utah gas prices are currently among the highest in the country, and have jumped 50 cents a gallon in just the last month, Beehive State drivers will likely be paying even more as the summer travel season approaches.

Escalating prices track back to higher demand and a petroleum market that's up significantly over the past year, American Automobile Association spokesman Michael Blasky told the Deseret News.

"The two biggest reasons we're seeing higher prices are due to oil price increases and we've still had record travel demand," Blasky said. "New reports from the federal government show travel volume this past winter was one of the highest in many years and we're continuing to see that this spring."

A year ago, a barrel of crude oil was trading for about $50 and Utahns were paying about $2.40 a gallon for regular gasoline. On Monday, the average price of regular was at $2.94 for Utahns — eighth highest in the country according to AAA data, and crude oil prices were hovering around $67/barrel.

Utah gas prices

Heather Tuttle

Utah gas prices

Blasky said it's typical for seasonal price fluctuations to start moving up about this time of year and to continue rising through the beginning of the summer travel season, commonly considered as running from Memorial Day through Labor Day. He noted it's hard to identify a specific buyer tolerance threshold, after which gas prices start to alter travel decisions, but that whole dollar price benchmarks come with some psychological impacts.

"Just based on the feedback we get from our members, things get a lot more interesting when it hits $3 a gallon for Utahns," Blasky said. "The same happens in California, where fuel runs higher, when the price hits $4."

For Salt Lake City business owner Michael Williams, the pinch point has already been achieved.

Williams owns Salt Lake City Tours, a tour bus company that's been around for over 30 years and operates 15 vehicles on sight-seeing trips in and around the capital city and along the Wasatch Front. Williams said the rising prices are raising red flags for his operation.

"We have significant fuel costs," Williams said. "Our buses are constantly on the road and price changes highly impact what we do."

Williams said the large increase over the past month has left him scratching his head, and rising costs are putting him in a position where he has to consider making upward adjustments to what he charges for tours to cover the additional overhead.

"Once we have approached and passed the $2.75 mark, we have to think about our prices," Williams said. "If we don't, our bottom line just shrinks away."

In addition to the rise in wholesale petroleum costs and high travel volume, another seasonal factor plays into retail fuel prices going up every year at this time.

According to AAA, refineries make a switch in early spring from winter fuel processing to a summer fuel "blend." And while that may sound like hokum to some, there is actually a functional rationale behind the switch.

The winter fuel mixture formula results in a product with a lower evaporation temperature, making the fuel more friendly to combustion engines in colder winter weather. The summer blend, with a higher evaporative temperature, burns cleaner than its winter cousin and can also give motorists slightly better gas mileage since it packs more energy into every gallon.

Unfortunately, summer fuel also requires more processing at a higher expense, and those added costs are typically passed on to consumers.