Posted on 10/14/2006 11:20:10 AM PDT by thackney
A report ordered by Gov. Jon Huntsman blames gas stations, not refineries, for "gouging" motorists with stubbornly high gasoline prices.
"Our report revealed that gas retailers are making a healthy profit off Utah consumers and continue to do so even as rack prices keep dropping," Huntsman's commerce chief, Francine Giani, said Friday. "While these business owners may not be breaking any Utah laws, they are certainly gouging fellow citizens at the pump."
While the gas retailers haven't been found to have violated any Utah laws, that doesn't mean the Governor's Office will stop monitoring gasoline prices in Utah, said Mike Mower, spokesman for Huntsman's office.
"The state's report shows retailers charged higher prices. What hasn't been uncovered is criminal intent or a conspiracy to artificially inflate gasoline prices," he said. "Had there been actual proof of price gouging, then the Attorney General's Office would have gotten involved."
Mower said Huntsman will continue to monitor gas prices over the next few months to determine if Utah's prices align with national prices, or whether further action is needed.
"If Utah's prices don't come in line with national prices within a month, then the Governor's Office will consider other options including regulatory action," Mower said.
Utah gasoline prices averaged $2.57 a gallon for unleaded on Thursday, compared with the national average of $2.25, Giani's report said. That 32-cent disparity has remained constant since Sept. 11, she said. On Friday, gasoline prices averaged $2.52 in the Provo-Orem area, down from $2.92 a month ago, according to AAA Utah.
While Giani blamed retailers, she couldn't get the gas stations or Utah's five refineries to reveal their profit margins for a definitive analysis.
In response to bottom-line questions from Giani, some refineries simply referred her to their corporate Web sites, which didn't reveal any useful information. One refinery didn't respond at all.
Giani quizzed 24 randomly chosen gas station operators, but only four responded, all in rural Utah. They revealed their "rack" prices -- the stated price at bulk fuel terminals -- but Giani said none of the retailers disclosed routine discounts that lower the rack price.
"The retailers are an easy target," said John Hill, executive director of the Utah Petroleum Marketers & Retailers Association, which represents gasoline stations.
In an interview, he took exception to Giani's findings, while acknowledging gas stations have been pocketing more profits than usual.
"Last week I ran the numbers, and they made 15.6 cents (a gallon) in profit, which was a 6 percent profit -- not gouging," Hill said.
For much of the year, Utah gas prices were lower than the national average and retailers made only 6 cents to 8 cents a gallon, a normal profit rate, he said. Hill's group represents 80 gas station operators and distributors who deliver fuel.
The fuel distributors complicated Giani's efforts to determine what part of the supply chain was profiting most from gasoline sales in Utah.
Hill blamed refineries, saying their rack prices have been as much as 40 percent higher than the national average. Lee Peacock, president of the Utah Petroleum Association, which represents major oil companies, didn't immediately return a call Friday from The Associated Press.
Utah has an isolated gasoline market, buffeted from national forces that can lower prices. For the same reason, Utah's gas prices have often been lower than the national average.
But the state's strong economy is keeping gas prices high while prices elsewhere decline, and Giani's report says gasoline consumption in Utah has risen nearly 3 percent a year since 1990. Giani warned that Utah gas prices could creep higher over the long term because Utah's refineries are operating at near capacity and no refinery is planning to expand production.
Also running at capacity are pipelines that bring crude oil from Canada, Wyoming and the Uinta basin to the North Salt Lake City refineries.
Adding to Utah's tight supplies, some of the refineries are exporting gasoline to Idaho and Washington, Giani said.
Mower, citing data from Utahgasprices.com, which tracks some of the lowest gas prices statewide, says gasoline prices in Utah have dropped from a high of around $2.90 on Sept. 15 when the Governor's Office launched its investigation, to around $2.45 on Friday.
Based on that data, Utah's gas prices have fallen but remain 24 cents above the national average, Mower said.
"We've narrowed the price gap by about a third since the investigation began," he said.
http://gasbuddy.com/gb_gastemperaturemap.aspx
See if you notice a geographical discontinuity in price.
What percent of the cost of a gallon of gas is state tax in Utah? Is there excessive regulations and red tape? Yes - we do need a FULL investigation.
Headline: "Gas Gouging is Official."
Article: "What hasn't been uncovered is criminal intent or a conspiracy to artificially inflate gasoline prices," he said. "Had there been actual proof of price gouging, then the Attorney General's Office would have gotten involved."
So there is no proof, yet it's official. Do they write the headline and then just put anything in the actual article? I hate the press.
It would seem that state and fed taxes don't always end up directly reflected in gas prices. Che3ck out OH & MI. Much more difference in taxes than prices. Something is going on, but exactly what, I don't know. (Doesn't make much difference to me as I'm still burning Diesel purchased July 10, 2006)
There's no such thing as price gouging in a free market. You choose to pay what you want. You shop prices or you don't drive etc. This article and that Gov is a bunch of BS!
Gouging? That's what it's called when the people who actually do the work make a profit that's 1/3 that of the government's take on each sale? Sure, makes sense -- business owner takes the risk, runs the shop, takes responsibility for upkeep and liability and then is painted by the government as dishonest when they dare to take a profit on their efforts. Heaven forbid!
Ladies and Germs, come and get your can of "Doublespeak"! Now you too can change a non-story into a story, just like professional journalists! Today only just $19.95!!!!!!!!!!!
Why not?... The federal, State and local givernments are gouging also(TAXES).. TAXing energy in ANY form should be illegal.. It raises the prices literally everything.. and adds to the economy NOTHING.. but is a second shearing of the sheeple..
Yes.
Someone call the Attorney General, consumers have been "gouging" the retailers!!!!
If you have a free market. Hard to do when government puts so many regulations on a necessary commodity and forgets that the company has the power to pass it onto the customer.
No information from RETAILERS or REFINERS
So being a typical politician, the governor grabs a headline without having a definitive analysis.
Ditto. A retailer adjusts his prices to maximize his profits. At the correct price, his profits decline if he either raises or lowers the price. If he raises it, he loses customers, if he lowers it he loses revenue.
Flagstaff, Arizona current prices around $2.32 per gallon.
I know someone who runs a gas station and he gets in constant arguments with people over this, and he has to constantly tell them, that their profit margins are in the range of 8% per gallon regardless of the posted price.
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