Alaska editorial: Taxed or not, gas price problem won't go away

Posted: Friday, July 10, 2009

Even though Alaska has suspended the state gasoline tax, we are still stuck paying some of the highest gasoline prices in the country. Last week, reported that Anchorage's price for unleaded was 30 cents higher than the national average.

When you factor in taxes, the price spread is even wider. The Gasbuddy survey uses the retail price, which includes all taxes. Many states levy a tax of more than 20 cents a gallon, meaning Alaska's gas prices, net of taxes, are half a buck higher than many Americans are paying.

State Rep. Pete Petersen, D-Muldoon, is well aware of the problem, but his bill on gasoline price gouging went nowhere in this year's Legislature. HB68 drew predictable opposition from the state's refiners and strong support from citizens who spoke at a hearing this spring. With the end of the session near, and gasoline prices beginning to drop, Rep. Petersen's bill went on the shelf.

Now, gasoline prices have shot up again, and our Alaska prices are still stuck at the high end of the national scale.

"Three separate investigations have shown that Alaska's high fuel prices are caused by abnormally high margins charged by Alaska's two major oil refineries." Rep. Petersen told his constituents in a recent newsletter. "Currently Alaska has no law against charging excessive or exorbitant fuel prices."

Rep. Petersen wants House Labor and Commerce Committee chair Kurt Olson, R-Kenai, to hold hearings on the bill during the Legislature's off-season so it's ready to move when lawmakers come back next January. "No," Rep. Olson said Friday. "I don't think there'll be any hearings this summer."

He made it clear that Rep. Petersen's bill, which would require refiners to justify charging a wholesale price more than 10 percent higher than a Washington state average, will not pass as written. Rep. Olson pointed to Alaska's limited market, its reliance on just two refiners and unresolved questions over just what effects such legislation would have on the refiners as reasons Petersen's bill won't fly.

So is the issue dead in the House?

"Definitely not," Olson said. He's been talking with Ed Sniffen, as assistant attorney general who has investigated Alaska refiners and fuel prices, and plans more hearings when the Legislature reconvenes in January.

Here's the rub - or two rubs.

• Alaskans' anger at fuel prices cooled with the plunge in oil prices that knocked about $2 a gallon from prices between their peak in summer 2008 and last winter. But those prices are rising again, pushing $3 by Friday. The anger will rise again too.

• That anger isn't just a reaction to the pump price. The explanations haven't been convincing. Alaskans hear all the talk about our limited market, lack of competition and high cost of doing business. But it doesn't quite add up - we've got oil here, and refiners, but our prices remain well above national averages.

This issue isn't going away until prices settle closer to the national average or Alaskans are satisfied that they can't. Neither has happened yet.

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