Survey Shows Fuel Cost Differences

By Dave Donaldson

The results of a statewide survey released this week shows Alaskans pay considerably more for their fuel than the rest of the U-S.  It also showed high price variations among communities within Alaska. 

The report on the survey by the Division of Community and Regional Affairs found heating oil prices averaging $5.36 a gallon and gasoline averaging $5.01 a gallon in Alaska .  That’s close to double national averages showing heating oil at $2.99 a gallon — and gasoline at  $2.72.

There are explanations for much of the fuel price differentials — high transportation costs for example,  as air delivery is needed in some communities.  However,  Anchorage Senator Bill Wielechowski says some unexplained discrepancies stand out.

If you look at this report, you see some interesting things.  You see that you have various communities that are paying much, much more than  other nearby communities.  And you have to ask Why is that happening?   And I think there’s an argument to be made that people in certain communities in rural Alaska are paying excessive and exorbitant prices.   Probably higher than they should be paying.

Wielchowski in the Senate and Anchorage Democrat Pete Petersen in the House have introduced bills that would allow the Department of Law to investigate — and bring charges if necessary — to find out whether Alaskans  are paying too much for their fuel — by retailers, distributors or refineries.   They want to know if there is price gouging.  Petersen says he wants to get to the bottom of the issue.

The citizens of Alaska are questioning — and you see letters to the editor on  a regular basis — and I get e-mails, phone calls from constituents.  And people in other districts are saying “What’s going on here?”  And people who have moved here from other states and they go, “Why is it so high here?”  They’re asking the question, we’re trying to get the answer for them.

The two bills vary little — Wielechowski’s bases an investigation on the refinery charges,  Petersen’s keys an investigation of price gouging on the difference between Alaska and Washington state prices.   Wielechowski’s says prices may not be “unconscionable” — Petersen’s says they shouldn’t be “exorbitant or excessive”.   They’re talking about the same thing — and Petersen says the courts or attorney general’s office could define them.

Historically, until we got into the summer of 2008,  there had never been a ten percent margin of difference between Washington State and Alaska.  Traditionally,  it had been much less difference than that, and in some instances, we were much less lower than Washington state.   And so,  all of a sudden there had been this disconnect. And we were trying to find out Why and we’re still trying to find out Why.

Both bills leave an investigation to the Attorney General — and the Department of Law could ignore a price differential if there’s an explanation from the supplier.   As with all investigations,  the findings would be kept secret.   But if there’s a conviction,   the penalties could be stiff:   ten times the economic benefit to the supplier.

Neither bill has been scheduled for hearings so far this year.


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