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High gas prices? This may just be the start
by Bob Mickelson
Mar 08, 2004 | 69 views | 0 0 comments | 1 1 recommendations | email to a friend | print
BOUNTIFUL -- The recent decision by the Organization of Petroleum Export Countries (OPEC) to cut production has had a predictable impact on gasoline prices.
Davis County has suffered increases reaching double digits at the pumps, with prices now exceeding $1.70 in most locations.
In fact, a few south county locations are now reaching the $1.79 mark and prices ranging from $1.71 to $1.75 are common. Up north, the cost for a gallon of self-serve unleaded regular is also hovering at around $1.73 to $1.75, but a few sub-$1.70 locations were spotted.
For most county drivers, the question isn't will the higher gas price have an affect on driving habits. Driving habits are being affected. The only question now being asked is "how much worse will things get?"
"Gas prices are just ridiculous," stated Terrie Williams, a resident of Bountiful. "If they get any higher it will definitely affect how much I drive."
Rachel Kovacs of Farmington was a little more definite.
"I always look for the cheapest gas," she said, "while driving around as little as possible. I take the bus or walk whenever possible. I also carpool with my friends to help keep costs down."
Kovacs added that she hoped this would signal America that some changes are needed.
"I really feel America needs to work toward developing cleaner fuels," she noted. "It would help the environment and reduce our dependence on Middle Eastern oil."
Dave Maynard, another Bountiful area resident, had no doubts about the situation.
"Of course, it has affected my driving habits," he stated. "I try to schedule my appointments and time on the roads so I can consolidate trips and accomplish things more efficiently."
Today's AAA Fuel Gauge Reports lists the Utah average at $1.76. That's still lower than the highest price ever recorded in the state, $1.83, but about seven cents higher than this time a year ago when the average was $1.69.
Record prices may well be in the offing, however. Many analysts have predicted that prices could exceed $2 a gallon this summer.
The Utah Petroleum Marketers and Retailers' Association (UPMRA) doesn't put all the blame on OPEC. The organization did cut oil production by 9 percent, in response to what it said was a weaker U.S. dollar.
But U.S. inventories of crude oil and refined products are at historically low levels due to disruptions in crude supplies to U.S. refiners, production needs have shifted to jet and diesel fuels to support the armed forces in the Middle East and demand for heating oil increased sharply because of harsh winter weather.


On top of that, refineries are beginning to produce new gasoline blends required in some states. There are at least 14 different blends of gasoline now being used across the country.
One analyst, Tom Kloza of the Oil Price Information Service in Lakewood, N.J., characterized the situation as a "perfect storm" scenario.
"For all the locally owned gas stations and convenience stores, competition on the street makes it difficult to pass price increases on to consumers," concluded Mike Wagstaff, president of the UPMRA. "But eventually, retail gas prices must track the rising cost of crude oil and the unstable market dynamics."
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