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Still feeling pain at the pump? Here’s why Utah lags the nation in falling gas prices

Gas station sign & prices in Sugar House, Salt Lake City, July 22, 2022
Jim Hill
/
KUER
Gas prices in the Sugar House neighborhood of Salt Lake City, on Friday, July 22, 2022.

Nothing compares to the freedom and control Fernando Alfredo Gonzalez feels when he’s behind the wheel.

“For me, driving has always been this sense of liberation,” Gonzalez said.

And for about the last year, Gonzalez has made the bulk of his income driving for Uber and Lyft. He’ll occasionally deliver DoorDash meals, too.

But Utah’s record-breaking gas prices have made it challenging for him to turn a profit.

Earlier in July, the median price for gas in Utah reached an all-time high — a whopping $5.26 for unleaded. As of July 24, the average cost for a gallon of regular gasoline barely dipped below five bucks.

The above-normal gas prices forced Gonzalez to re-think his next paycheck.

“The way costs are right now, it's not as sustainable as it was a year ago,” Gonzalez said. “So I've decided to try and pursue something different, hopefully until prices go back down.”

The price of gas is expected to fall. Not by much, though.

Denton Cinquegrana, the chief oil analyst for Oil Price Information Services, predicts fuel will dip about 10 cents nationally over the next week.

However, that 10-cent drop won’t return Gonzalez to the comfort of his car, especially since he fills his tank with premium gas.

“On average, it costs $80 to fill my tank. I’m making around $100-$130 on each tank of gas. Gonzalez said. “I need it [gas] to be no more than $4 [per gallon].”

Why is gas in Utah so expensive?

John Treanor, the spokesperson for AAA in the Mountain West, said Utah normally pays more for gas than the rest of the nation. But it’s catching the attention of more Utahns this time around.

A lot of factors play a role in the higher prices, Treanor said, and there’s no one scapegoat to point fingers at.

Inflation, supply and demand, the war in Ukraine and the ease in COVID-19 restrictions all contribute to increased gas prices.

Despite there being five oil refineries throughout Utah, they can only churn out roughly 150,000 barrels of oil products a day, which isn’t enough to meet demand, Cinquegrana said.

And on top of that, Utah has to import the majority (approximately 72%) of its oil — and it’s not cheap.

“You [Utah] buy it [oil] from different states. You bring it in from different states. And those transportation costs add up,” Treanor said. “[The] trucking industry has been hit with labor shortages. So now you're dealing with labor problems, and that's more expensive.”

Treanor attributes the mild dip in fuel prices to the decrease in demand. Since more Utahns have opted not to drive to save money, the gas supply is up.

All that can change in a blink of an eye.

“The big question we have is will there be a point where prices get low enough that Americans start taking their demand back up? And if so, what effect is that going to have on prices?” Treanor asked.

The answer to that question, Treanor said, is a waiting game.

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