Motorists Seek Explanations for High Gas Prices
WASHINGTON. Sept. 23 – New Hampshire motorists have been seeing some minor relief at the pump lately, but some people want to know why gas prices surged when Hurricane Katrina crippled oil production on the Gulf Coast, an area that does not supply New Hampshire with very much oil.
“I think the oil market is in chaos right now,” said Rep. Charles Bass. “But that doesn’t mean it isn’t a good idea to have a discussion about why prices are so high.”
On Bass’ website he encourages constituents to write in about suspicious gas pricing and possible gouging.
After only four days, Bass’ office turned in to the Federal Trade Commission more than 100 letters from New Hampshire motorists.
One motorist wrote on Sept 3: “Just an hour ago I drove by a local Mobil station in North Conway [Big Apple Mobil] and the price for regular unleaded was $2.99 (or may have been $2.89).. Not 45 minutes later when I drove back by, the gas had climbed to $3.29 – that is totally unacceptable.”
Another wrote: “A station on the corner of Mast Road and Plummer Rd. in Goffstown (Premium Gas) on Tuesday (8/30) morning was at $2.49 per gallon. Several hours later I drove by and the price had jumped to $2.89, a 40 cent increase…. The next morning, it was $3.25. I’m sorry but there is NO WAY their costs increased 76 cents per gallon in matter of hours. If you have inventory in your tanks already, there is no way you paid a higher price for that fuel. If you do charge more for existing inventory, then you HAVE to be accused of GOUGING.”
The FTC is currently conducting a nationwide investigation into the allegations of price fixing and collusion on the part of oil corporations and is expected to file a report with Congress by the end of the year.
“With anomalous activity, like a hurricane, it might make sense to see gas prices in Maryland increasing [because Maryland gets most of its gas from the region struck by Katrina],” said Mitch Katz, spokesman for the FTC. “But in a place like New Hampshire, why is that happening? That is just one of things we’ll have to take a look at.”
But the federal government is only investigating collusion on the part of corporations like Exxon Mobile or Shell Oil. The price gouging that is historically carried out by independent retailers or franchise owners is left to the states to handle. And New Hampshire has no law preventing an individual retailer from over-pricing his gas.
“We are not looking for gas gouging; the headlines are wrong,” said Katz. “We are looking for any instances of illegal fixing or collusion. A retailer can charge whatever they want for a gallon of gasoline.”
Bass says he is trying to push through legislation that would double the penalty for collusion by corporations in price gouging, but that one retailer overpricing his gas was boxing himself out the market anyway, and was not much of a threat t consumers.
“He can charge whatever he wants for gas,” said Bass. “But if it is $50, you’d be crazy to go to his gas station.”
But motorists trying to avoid brand-name retailers that may be overpricing gas should be on the look-out for gas station attendants who claim their credit card machine is broken, according to Tad Furtado, Bass’ policy director.
“He wants to be paid cash because he doesn’t want the record of his price getting back to the company,” said Furtado.
Meanwhile, oil and gas companies say that oil is a global market and whenever there is a disruption in the global supply, prices increase.
“In previous hurricanes, only crude production was lost form platforms in the Gulf of Mexico,” said Sara Banaszak, a spokeswoman for the American Petroleum Institute. “But with Katrina, there were pipeline and refinery disruptions. This is an unprecedented event and the affects are hard to measure.”
The oil industry has regained some of the 11 percent reduction in refining capacity it lost as a result of Katrina, Banaszak said, but with Hurricane Rita tearing its way through the Gulf, the supply disruption may last for quite a while.
On Sept. 23, the price for a gallon of regular unleaded gasoline ranged from $2.59 to $2.95 in New Hampshire, according to AAA.
“Frankly, our prices are a lower than other states,” said Bass.
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