Gasping for answers — House Judiciary holds hearings to investigate high fuel costs

By Naomi Klouda
Homer Tribune

Where fuel comes from, and how much is paid, is a question the Alaska attorney general’s office and the Alaska Legislature’s House Judiciary Committee is asking, to determine if Alaska consumers are getting a fair price.

Ed Sniffen, senior assistant attorney general, said the outcome of this investigation should supply the public with an explanation about why gas and fuel prices did not go down in Alaska when they tumbled in the states.

“We get calls every day from people saying, ‘I’m getting gouged by these gas prices,’” Sniffen said.

But Alaska doesn’t have a law regulating the profits a company can make, following the free market system in American ideology, he said.

“Yet, there was a little window of time starting in early June and lasting until early September when the prices of fuel seemed supra-competitively high, a bubble way above those levels for no specific reason,” Sniffen said. At no time in Alaska history, tracing the price of fuel back, did prices track that way.

“Every place in the nation was going down and Alaska stayed the same for a long time,” he said.

That’s when the attorney general’s office decided to start investigating the matter, conducting hearings with fuel retailers and wholesalers to figure out what is going on. On Thursday, the House Judiciary Committee convened in Anchorage for a second time to hear from the refineries.

“Certainly, we are seeing some weird things that suggest to me something fishy is going on,” Sniffen said.

The House can ask questions of Alaska’s three main petroleum refineries, Petro Star, Tesoro Alaska and FlintHills, but they can’t require them to answer specific cost and price questions because those are protected by confidentiality in a competitive market setting. But the attorney general’s office can subpoena documents, and in turn offers confidentiality, Sniffen said.

He said the judiciary committee has requested documents from Tesoro and information from Crowley and Delta Western, the two shipping companies in Southeastern Alaska that supply fuel.

Smokey Norton, director of marketing for Petro Marine, a fuel distributor on the peninsula, said there are a number of reasons why consumers didn’t see a price dip when the cost of crude dipped to $72 from a long haul of over $100 a barrel.

Right now wholesalers are still holding on to inventory from July when crude remained high.

“If you buy it at $2 a gallon, even though it goes down to $1 a gallon, consumers won’t see that at the pump until they purchase new fuel at the lower price,” she said.