Senator wants gas price regulation

Posted: Friday, January 01, 2010

ANCHORAGE - A state senator from Anchorage is calling for gas prices to be regulated, saying oil refineries have been gouging Alaskans at the pump

The state's oil refineries are making far more profit on their gasoline than the national average, according to the report released Wednesday by Sen. Bill Wielechowski and authored by the nonpartisan Legislative Research Services Division.

Wielechowski, a Democrat, estimates that for every gallon Alaskans pump into their cars, they are paying 54 cents more to the refineries than what Lower 48 consumers pay.

Alaska has only two gasoline refineries - Tesoro in Nikiski and Flint Hills in North Pole.

Tesoro spokesman Kip Knudson strongly disagreed with the senator's position, telling the Anchorage Daily News that the refinery business isn't as lucrative as perceived.

"If we are making so much money, why is one refinery in trouble and why aren't more people building refineries?" Knudson said, referring to the beleaguered Flint Hills in the Interior.

Flint Hills spokesman Jeff Cook declined comment, saying he hadn't looked at the report.

At $3.39 per gallon, Alaska had the highest gas prices in the nation on Wednesday, according to the American Automobile Association.

The Alaska attorney general's office investigated the state's gas prices in early 2009 and found no evidence of illegal price-fixing among sellers. Its report cited market conditions peculiar to Alaska for causing gas prices to stay high while pump prices in the Lower 48 dropped.

The attorney general's office performed a similar inquiry in 2002 and drew a similar conclusion.

Several bills were introduced during the 2009 legislative session to challenge the price at the pump. One Senate bill made its through several committees but then stalled amid promises that prices would stabilize, Wielechowski said.

"We were assured by a Tesoro representative that Alaskan gasoline prices were merely lagging behind those of the Lower 48, and that they would soon come down," Wielechowski said.

Rep. Jay Ramras, R-Fairbanks, agrees with Wielechowski about Alaska's gas prices, calling them "eye-popping," and calls the refineries' business practices "disappointing corporate behavior." But he disagrees with the senator's call for prices to be regulated.

He said the new report is not looking at fair comparisons because it doesn't account for Lower 48 refineries "dumping" gas at below cost because the recession has dampened demand.

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