Gas prices in Utah: Shut up already. There is no conspiracy.

The local media in Utah has taken it upon themselves to incessently harp about gas prices in the region. Here’s the story being told:

• Gas prices around the country are dropping precipitously
• Utah gas prices are dropping slowly
• Utahns are paying 20 to 30 cents more per gallon than the rest of the country

The conclusion the media feeds to us is that Utah residents are being gouged. An all-out witch hunt has been started, even going so far as to call for state legislators to investigate the reason for the high prices. KSL called for a one-day “boycott”. Heck - even the governor has decided to start a probe into the prices.

Look at the data for yourself

The sensationalist media seems to prey on the uninformed public being too busy to actually look at the data and think for themselves.

One Simple Explanation: Utah prices lag the national average by a few weeks

Note in the chart above, that in March the Rocky Mountain region was paying less than the national average. Hmm… You will also notice that if you shift the price curve over a few weeks - you will see that the Rocky Mountain Region pretty well mirrors the national average, only it lags behind by a few weeks. When prices are increasing, this favors Utah - because people we will be paying two-week old prices… but when prices drop sharply in the national average, we pay more.
Why is this so hard to understand? Sure I don’t know exactly what CAUSES the lag in prices, but it’s pretty simple to see on the graph - if you allow for a 5% to 10% error it’s a pretty decent approximation.
Also notice this: Prices in the Rocky Mountain region (that contains utah) are dropping just as sharply as the national prices. (Funny side note: I’ve heard local media taking credit for this drop in Utah gas prices, saying such things as: “Yes, I know gas prices are down to 2.49 a gallon, but can you imagine where they would be if we didn’t bring so much attention to it?” (My guess - probably even lower. It seems the only thing the attention has done is curb a slight amount of demand which has, in turn, stretched out the lag time of gas prices in Utah because they can’t move their supply as quickly, and therefore they are stuck trying to sell off the old gas that they bought at two-week-ago prices for a longer period of time)

It’s not just Utah

It’s conventient to go on a rant about how we are paying higher than the national average - but anyone who passed high school algebra should know that when you have an average in a population with any variance, you are going to have some values above the average and some values below it. That’s why it’s called an average.

In the above graph, the national average has little red triangles on it to make it easy to identify. From the above graph, you can see that a lot of regions are paying above the national average - and the West Coast (the top line) is worse of than the Rocky Mountain region.Note, some regions seem to overlap - which is what makes it look like there are more regions paying above the average than there are paying below it. I didn’t slice the country into regions, I just used ones that the government already had.

According to the logic of the media - only people living in the Lower Atlantic, Midwest, or Gulf Coast regions of the country are not being “gouged” by “evil oil barrons.”

In Conclusion

If you are a member of the Utah media and are tempted to continue going off on this topic - please be aware that eventually the quiet thinking members of society will get fed up and expose you for the idiots you are. This is a non-issue. Go find someone abusing puppies or something to talk about, and stop wasting my time telling me how I’m being “taken advantage of” and showing clips of random people at gas stations answering the question: “Which do you feel: violated, or gang-raped by the big oil company that is stealing food from your starving children’s mouths?”