Get Gephardt: No, really, why are Utah gas prices still higher than the national average?

Sep 22, 2022, 8:16 PM | Updated: Sep 23, 2022, 6:48 am

NORTH SALT LAKE, Utah — It’s the most common question KSL receives from viewers: Why are gas prices in Utah so much higher than in other parts of the country?

The questions aren’t without reason. While the rest of the country has seen a drastic reprieve in gas prices, Utah lags significantly behind.

According to AAA, the national average for a gallon of gas sits at $3.681. Utah’s paying about 60 cents more, averaging $4.229 per gallon.

“It’ll come around,” said Ken Boyle, a St. George resident. “We’ll catch up eventually.”

Waiting for Utah gas prices to drop comes with a certain frustration.

“What is it?” questioned Boyle, “Is it price gouging? Why are we so slow?” It’s a sentiment heard in dozens of emails, calls and social media posts to KSL Investigators. Some point to “all the major refineries in the Salt Lake Valley,” suggesting our gas production capabilities shouldn’t be holding us back from sliding prices.

A picture of Utah’s oil production

Utah does have a robust oil production industry. According to data from the U.S. Energy Information Association, Utah ranked 10th in the nation for oil production in 2020.

Utah’s five oil refineries process about 204,000 barrels per day, more than enough to cover the 121,000 barrels Utahns consume daily. Most of the gasoline consumed in Utah is created from Utah refineries.

Utah produces so much gasoline, we found the refineries boast of supplying gasoline to several western states, including Idaho, Nevada, Wyoming, Washington, and Oregon.

Utah also has oil pipelines—three major ones spanning over a thousand miles. They bring refined gas products from the Sinclair refinery in Wyoming to the Wasatch Front and carry refined product from the North Salt Lake refineries to other states like Idaho and Nevada.

The Utah Petroleum Association said most of the motor fuel Utahns use is produced from those North Salt Lake refineries.

It’s not really a lot of gas produced

Looking at the numbers, it seems like a no-brainer that Utah would be self-sufficient in gasoline, and therefore have lower prices.

It’s not that simple.

Get Gephardt spoke with Tom Holst, senior energy analyst at the Kem Gardner Policy Institute. Holst worked in the oil industry for decades all over the world. He said while it seems like Utah produces a lot, we really don’t.

“In the Gulf Coast, they collectively process 5 million barrels per day,” explained Holst.

That’s 25 times more than Utah.

The Gulf Coast’s massive supply, when compared to Utah and how many states it supplies, is one reason we pay more for gas.

Free market at work

Holst says there are other contributing factors: state gas taxes in Utah are 31.9 cents per gallon, slightly higher than the national average of 28.85 cents per gallon. We have fewer pipelines, which means more expensive trucks are used to deliver both crude oil and refined products to end users.

And yes, politics and profits can also factor in.

In a free market system, oil companies are free to sell to whoever will pay the highest price.

“The refiners in North Salt Lake have made significant investments and their refined products will seek the highest price that it can,” said Holst.

Despite many hurdles the industry is facing—like labor shortages, sanctions on Russian products, and fewer oil leases available for purchase – oil companies are recording record profits.

According to the U.S. House Committee on Energy and Commerce, Chevron reported profits of $11.6 billion last quarter. Shell came in with $11.47 billion. BP earned $8.45 billion, and Exxon reported profits of $17.9 billion — the highest quarterly profit reported by any oil company in history.

Utah Petroleum Association defended the free market economics of oil companies, pointing out that only “2.4%” of those profits go to the companies’ ‘corporate officers.’” This equates to $429.6 million in the case of Exxon.

Through a “Utah Gas Prices Explainer” flyer, UPA said most of those profits go to “millions of Americans — through retirement funds like 401(K)s, and private and public pension funds.” These are paid out to stockholders through dividends on their shares.

UPA pointed out “refiners own less than 5% of the 145,000 retail stations across the country.” A spokesperson told Get Gephardt, “UPA does not represent retail gas stations and that’s where the rubber meets the road here.”

So we went to Dave Davis, president of the Utah Food Industry Association which does represent retail gas stations, to find out: Is the gouging happening at the actual gas pump?

Davis indicated it’s likely not the retailers causing pain at the pump.

“At a retail level, we’re not seeing a significant increase in the gross margin on fuel,” Davis explained.

Turning to alternative fuels

Though pain at the pump continues, Holst was optimistic that good things will emerge, specifically that Utahns will become less reliant on oil and gasoline for transportation.

“Electronic vehicles are becoming mainstream,” said Holst. “The EV adoption rate by Utahns is higher than the national average.”

He’s right. The U.S. Department of Energy showed 16,480 electric vehicles registered to Utahns at the end of 2021, or five per every 1,000 people. The national average for EV adoption is three per 1,000 people.

Utah’s gas prices have fallen $1.041 per gallon since the all-time average high of $5.262 on July 1, 2022. While prices continue to fall here, national prices have started to rise again due to fluctuating prices on crude oil.

Demands on gasoline supply as we head into the winter months will play a big role in determining if Utah gas prices remain on a downward trend.

Have you experienced something you think just isn’t right? The KSL Investigators want to help. Submit your tip at investigates@ksl.com or 385-707-6153 so we can get working for you.

KSL 5 TV Live

Top Stories

KSL Investigates

Daniella Rivera

Tracking Transparency: Why prison surveillance videos are rarely released to the public

Since this investigation aired last night, we've heard from some of you wondering why the state is withholding these videos from the public. Here's some of the transparency issues.
3 days ago
Matt Gephardt & Sloan Schrage, KSL TV

Get Gephardt helps Farmington traveler get reimbursed after getting bumped from her flight

A woman paid Delta Airlines $617 to upgrade her seat. But when she arrived at the airport, she found she had no seat at all.
4 days ago
Daniella Rivera

‘They’re all in imminent danger’: Video shows violence after Utah prison allowed gangs to mingle

Corrections officials say they're doing all they can to keep the people in their custody safe, and policies at the new prison will help. Families of those on the inside say it's not enough.
4 days ago
Matt Gephardt and Cindy St. Clair, KSL TV

Get Gephardt: Surgeon no-shows for pre-paid procedure

Imagine paying for surgery, only to have the surgeon no-show. It happened to a Herriman woman, and when she couldn't get her money back, she decided it was time to Get Gephardt.
5 days ago
Matt Gephardt & Sloan Schrage, KSL TV

Get Gephardt: Is your car spying on you?

KSL Investigates the privacy and security that you put at risk when your car is connected, and what to do about it.
6 days ago
Matt Gephardt

Get Gephardt: Tips for lowering your interest rates

There are some simple things you can do to keep your interest rates relatively low.
6 days ago

Sponsored Articles

young woman with stickers on laptop computer...
Les Olson

7 ways print marketing materials can boost your business

Custom print marketing materials are a great way to leave an impression on clients or customers. Read for a few ideas to spread the word about your product or company.
young woman throwing clothes to organize a walk in closet...
Lighting Design

How to organize your walk-in closet | 7 easy tips to streamline your storage today

Read our tips to learn how to organize your walk-in closet for more storage space. These seven easy tips can help you get the most out of your space.
Types of Computer Malware and Examples...
PC Laptops

5 Nasty Types of Computer Malware and Examples | Everything You Need to Know to Keep Your Computer and Family Safe

Here are the different types of computer malware and examples that could potentially infect your computer.
tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
Get Gephardt: No, really, why are Utah gas prices still higher than the national average?