Natural gas car in Utah © Kiichiro Sato/AP Photo

The Basics

Fill up for $5? You can in Utah

Cars that run on compressed natural gas are taking advantage of the lowest prices in the nation, and that's driving up demand for both the fuel and the vehicles that run on it.

By The Associated Press

Troy Anderson was at a gas pump in Salt Lake City and couldn't have been happier, filling up at a rate of $5 per tank.

Anderson was paying the equivalent of 63.8 cents a gallon for compressed natural gas, making Utah a hot market for vehicles that run on the fuel.

It's the country's cheapest rate for compressed gas, according to the Natural Gas Vehicle Coalition, and far less than the $3.60 or so national average price for a gallon of gasoline.

'This is practically free'

"I'm totally celebrating," crowed Anderson, a social worker, who picked up a used Honda Civic GX earlier this year. "This is the greatest thing. I can't believe more people aren't talking about it. This is practically free."

Personal ownership of natural-gas-fueled vehicles in Utah has soared from practically nothing a few years ago to an estimated 5,000 autos today, overwhelming a growing refueling network, where compressors sometimes can't maintain enough pressure to fill tanks for every customer.

"Nobody expected this kind of growth. We got caught by the demand," said Gordon Larsen, a supervisor at Utah utility Questar Gas.

Utah has 91 stations, including 20 open to the public, mostly in the Salt Lake City area. The others are reserved for commercial users, such as school districts, bus fleets and big businesses, including a Coca-Cola distributor.

It's possible to drive the interstates from Rock Springs, Wyo., to St. George, Utah -- a distance of 477 miles -- and find 22 places to pull off and fill up.

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California has more stations, but prices are much higher there, the equivalent of $2.50 a gallon for gasoline.

"Utah has the cheapest prices by a big margin," said Richard Kolodziej, the president of the Natural Gas Vehicle Coalition, whose members include utilities, Honda Motor, environmental groups and transit agencies.

Among major utilities outside Alaska, Questar is the country's cheapest provider of natural gas for home use. It can offer compressed natural gas for cars even cheaper because of a federal tax credit.

The incentives don't stop there. Buyers of new and some used and converted vehicles can claim their own federal and state tax credits totaling up to $7,000 -- nearly the extra cost of a vehicle fueled by compressed natural gas, also known as CNG.

Video on MSN Money

Gas prices © Mark Weiss/Getty Images
$4 a gallon for gas?
Higher gas prices are likely as the summer driving season approaches. MSNBC's Chris Jansing talks to energy expert Randa Fahmy Hudome.

Republican Utah Gov. Jon Huntsman paid $12,000 of his own money to modify a state-owned Chevrolet Suburban last June.

"Converting to CNG gives us an opportunity to promote energy security and support a clean-burning alternative," Huntsman said in an e-mail. "Plus, who can beat running a Suburban on 63 cents a gallon?"

Continued: Automaker can't keep up with demand

READ MORE: GAS - HYBRID - MILEAGE - CAR SHOPPING

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