Investigation to start on high gas prices

Posted: Sunday, August 31, 2008

ANCHORAGE - State lawmakers will start investigating why gas prices are so high in the state.

House Speaker John Harris on Friday sent a letter asking House Judiciary Chairman Jay Ramras to open an investigation.

Specifically, Harris asked Ramras to look at why Alaska prices are not falling as fast as they are in the Lower 48.

Harris says the average price of a gallon of gasoline in Alaska is $4.50 or more, while it's fallen to an average of $3.68 elsewhere in the country.

"It just doesn't make sense to me - and to other Alaskan consumers - that when the price of crude oil goes up, the price at the pump goes up, too, right away. Yet, when the price of crude goes down, the price at the pump is a lot slower to drop," Harris said.

Motorists will soon get a break at the pumps, courtesy of the energy relief package passed by the Legislature. Part of the plan is eliminating the 8 cents a gallon state tax for a year.

That starts Monday, but consumers may not get immediate relief. It will start only after retailers clear inventory and start selling tax-free fuel from their suppliers, said Ed Sniffen, a state assistant attorney general who specializes in consumer protection.

He said retailers also are on the honor system to pass the break along to motorists.

Democratic lawmakers and Gov. Palin asked Attorney General Talis Colberg to look into gas prices. Sniffen has started that investigation, and says of recent gasoline pricing trends: "It's really looking fishy to me."

Petroleum economist Barry Pulliam of the Los Angeles consulting firm Econ One has been hired to help with the investigation. Sniffen said formal demands for records from refiners and others might be issued, Sniffen said.

"That's fine. We wish them the best. We'll help," said Kip Knudson, spokesman for Tesoro Alaska Co. Tesoro makes much of the state's gasoline at its Nikiski refinery, and it owns or supplies dozens of gas stations.

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