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PostPosted: Thu Sep 21, 2006 2:15 am 
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Joined: Sun May 12, 2002 12:18 am
Posts: 1134
Location: Idaho
If you live in the USA and want to gripe about the price at the pump, count your blessings, unless you live in Idaho.

It didn't take long for Lynn Loomis of Boise to figure out that Idaho gas prices are well above the national average.

During his recent annual automobile trip to Michigan, Loomis said he kept paying less and less the further east he drove. Nowhere did he pay as much as he did in Idaho.

Loomis wants to know why. So does Idaho Attorney General Lawrence Wasden. Unfortunately for Loomis and other Idahoans, there's not much Wasden can do about it, regardless of the reasons.

Last week, Wasden gave five refiners who supply gas to the Idaho market until Sept. 30 to explain why wholesale gas prices are higher here than in most other regions of the country.

But Brett DeLange, chief of the attorney general's consumer protection unit, said Wasden is handcuffed by an Idaho Consumer Protection Act that allows him to investigate only retail prices — not wholesale ones — and only during a declared emergency.

In essence, all Wasden can really do is tell us what we already know.

"We know what's going on with wholesale prices, and like everybody else we don't like it," DeLange said. "And if they don't respond, we'll let the public know about it."

Loomis kept track of the disparity in gas prices. He began his trip Sept. 5 by paying $2.94 a gallon at a Flying J Store in Boise. A day later, he paid $2.42 a gallon at a Fly J in Gretna, Neb. On Sept. 8, Loomis paid $2.41 a gallon in Burton, Mich. That entire time, regular unleaded gas in Idaho averaged $3 a gallon, according to AAA Idaho.

Loomis found even lower prices on the way home. He bought gas on Sept. 13 in Columbia, Mo., for $2.19 a gallon. Idaho's average price that day: $2.96.

"I thought I'd get back here and the price would be a lot lower. But it had come down just a little bit," Loomis said. "Don't they know that people already don't like the oil companies? They're just throwing throwing fuel on the fire."

Wasden's letters to Chevron USA, Shell Oil Products, Sinclair Oil Corp., Tesoro Corp. and Flying J Inc. concerned the wholesale price they're charging retailers. The retailer adds mark-ups to cover taxes, transportation, operating costs and profit.

Dan Johnson, a Salt Lake City-based spokesman for Chevron, said area wholesale prices are a function of supply, demand and the cost of shipping gasoline to remote mountain locations like Boise and Pocatello.

During the last 12 months, wholesale prices in Boise and Pocatello averaged $2.01 and $1.97 a gallon, respectively, compared with $2.14 in Las Vegas, $2.05 in Pasco, Wash., $2 in Denver and $1.97 in Salt Lake City, he said. Moreover, he said local prices have historically been slow to rise compared with other markets.

Bud Blackmore, a spokesman for Sinclair, said he expected local pump prices will continue to fall "as long as crude oil keeps coming down."

He conceded, however, that Idaho is at a competitive disadvantage because it has only one pair of pipelines — owned by Chevron — to bring gasoline products from Salt Lake City.

Tesoro spokeswoman Natalie Silva said Idaho's prices are not a wholesale price issue because the retail prices are set locally.

DeLange didn't buy that.

"We're not talking about retail prices," he said. "Besides, after prices went through the roof because of Hurricane Katrina last year, we were told that it's a global market and that if prices go up elsewhere, they also go up here. Now it's a local issue? Which is it? They can't have it both ways."

The fact is, the refiner's wholesale price is tied to the cost of the crude oil used in the manufacturing process. As crude oil prices have fallen from a peak of $76.98 a barrel on Aug. 7 to $61.66 on Tuesday, a six-month low, the wholesale price of gasoline has begun to come down nationwide, resulting in dramatically lower retail prices — except in Idaho.

In his letter to Chevron USA, Wasden pointed out that between Aug. 10 and Sept. 7 the company's wholesale price dipped 4.4 percent in Idaho but dropped 15 percent in Phoenix, 10 percent in Eugene, Ore., and 8 percent in Seattle.

His letter to Sinclair noted that the company's Idaho wholesale price — which affects pump prices — was down 4 percent during that period, while dropping 18 percent in Denver, 15 percent in Billings, Mont. and 13 percent in Casper, Wyo.

AAA Idaho reported Tuesday that the price of self-service regular unleaded in Idaho averaged $2.89 a gallon, or 40 cents above the U.S. average of $2.49. U.S. prices have fallen 45 cents a gallon in the last month but are down just 13 cents in Idaho.

AAA spokesman Dave Carlson said the lack of pipeline competition means refiners are slow to lower the price they charge Idaho retailers.

"They're willing to drop their prices in other markets because of competition (from other pipelines). But they don't have competition here," Carlson said.

At least two legislators are ready to jump into the fray.

Sen. John Andreason, R-Boise, and House Minority Leader Wendy Jaquet, D-Ketchum, said Tuesday they would consider proposing legislation to give Wasden authority to investigate the local wholesale gasoline market.

Andreason said he also would consider legislation to give the Idaho Public Utilities Commission the same regulatory and price-setting authority over wholesale gasoline prices as it has over electrical and natural gas service.

"They have just one pipeline. And that's a monopoly," he said.

But PUC spokesman Gene Fadness said no state has ever regulated the gasoline market. The state cannot regulate an interstate market without "some demonstration of a public interest unique to the state," he said.

"There's only one pipeline. Maybe that would make the state unique," Fadness said. "If the legislature told us to regulate gasoline prices, we would do it."

Meanwhile, consumers are unhappy.

Steve McCarty of McCall was skeptical that anyone could really do anything.

"The bottom line is they (refiners) do what they want, and we have to pay it," said McCarty as he filled up at a Maverik at Ustick and Cole, where the price had fallen to $2.83 a gallon. "They could charge $5 a gallon, and we'd pay it, because we haven't got any other way to get around."

Chuck Compton of Boise said he hoped Wasden would help bring prices down by putting public pressure on refiners.

"These prices are asinine," he said, pointing at his two children in the back seat of his car. "It's like they're stealing money out of my children's mouth."

August 1st, 2nd, 3rd, 2014

"I am a machine. I am a weapon of war. I am a destroyer of life in the service of life, the sword and shield of my human creators." Bolo Invincibilus, Mark XXIII, Model B (Experimental) 0075-NKE "Nike".

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