tigerhonaker
10-01-2006, 05:01 AM
Refiners respond to attorney general
Flying J official says if the state tries to regulate gas wholesale prices, Idaho could lose gas supplies
Three out of five Salt Lake City refiners who ship gasoline into the Idaho market responded Friday to Attorney General Lawrence Wasden's demand for an explanation about why Idaho's wholesale motor fuel prices are higher than in other states.
The responses ranged from polite explanations of local market forces to having only one pipeline supplying fuel to Idaho.
One letter from Flying J Inc. also included a blunt prediction that Idaho gasoline supplies would dry up if the state tries to regulate wholesale gasoline prices. Idaho would be in for a surprise if it followed a suggestion that the Idaho Public Utilities Commission regulate wholesale prices, wrote Flying J Vice President and General Counsel Barre G. Burgon. He said such a move would only encourage suppliers to sell their products elsewhere."If Idaho attempts to regulate profits out of motor fuels, the fuels will not end up in Idaho," Burgon wrote.
Brett DeLange, head of the attorney general's consumer protection unit, said Wasden would not comment until the remaining two oil companies had responded.
On Sept. 14, with gas prices hovering near $3 a gallon, Wasden wrote to Flying J, Sinclair Oil, Tesoro Corp., Chevron USA and Shell Oil Products asking why their wholesale prices were falling faster in other markets than in Idaho. The wholesale price is what refiners charge retailers for the gas they sell consumers. Retailers in Idaho add a mark-up to cover 43.4 cents in taxes, as well as varying amounts for transportation, delivery and operating costs. The result is the price at the pump.
AAA Idaho reported Friday that the statewide price for self-service regular unleaded was averaging $2.70 a gallon, or 37 cents a gallon more than the U.S. average. The Treasure Valley price was $2.66 a gallon, down 33 cents in the last month, but also 33 cents above Friday's national average.
Wasden gave the companies until today to respond.
The five oil companies operate Salt Lake City refineries that ship gasoline and diesel fuel products into Idaho on the Chevron common carrier pipeline.
In his letter to Chevron USA, Wasden said that between Aug. 10 and Sept. 7 the company«s wholesale price dropped 4.4 percent in Idaho, compared with 15 percent in Phoenix, 10 percent in Eugene, Ore., and 8 percent in Seattle.
Sinclair's wholesale costs, he wrote, were down 4 percent during that period, while dropping 18 percent in Denver, 15 percent in Billings, Mont. and 13 percent in Casper, Wyo.
Sinclair, Tesoro and Flying J delivered written responses Friday. Chevron spokesman Dan Johnson said the company expected to respond by day's end. At press time, Shell Oil's response had not been received.
The responses received Friday emphasized that Idaho gas prices are a reflection of supply and demand.
Sinclair spokesman M.C. "Bud" Blackmore noted that the company's wholesale price had fallen by 17 percent as of last Monday. W. Eugene Burden, Tesoro senior vice president for government relations, wrote that over the last year "Boise enjoyed significantly lower prices than the U.S. over the past year." However, local experts have consistently reported that Idaho gas prices are historically higher than the national average.
Wasden, however, is limited in how much further he can go on the wholesale price issue. The Idaho Consumer Protection Act only authorizes the attorney general to investigate retail gas prices, and only during times of a declared emergency.
Barre G. Burgon. He said such a move would only encourage suppliers to sell their products elsewhere.
"If Idaho attempts to regulate profits out of motor fuels, the fuels will not end up in Idaho," Burgon wrote.
Brett DeLange, head of the attorney general's consumer protection unit, said Wasden would not comment until the remaining two oil companies had responded.
On Sept. 14, with gas prices hovering near $3 a gallon, Wasden wrote to Flying J, Sinclair Oil, Tesoro Corp., Chevron USA and Shell Oil Products asking why their wholesale prices were falling faster in other markets than in Idaho. The wholesale price is what refiners charge retailers for the gas they sell consumers. Retailers in Idaho add a mark-up to cover 43.4 cents in taxes, as well as varying amounts for transportation, delivery and operating costs. The result is the price at the pump.
AAA Idaho reported Friday that the statewide price for self-service regular unleaded was averaging $2.70 a gallon, or 37 cents a gallon more than the U.S. average. The Treasure Valley price was $2.66 a gallon, down 33 cents in the last month, but also 33 cents above Friday's national average.
Wasden gave the companies until today to respond.
The five oil companies operate Salt Lake City refineries that ship gasoline and diesel fuel products into Idaho on the Chevron common carrier pipeline.
In his letter to Chevron USA, Wasden said that between Aug. 10 and Sept. 7 the company«s wholesale price dropped 4.4 percent in Idaho, compared with 15 percent in Phoenix, 10 percent in Eugene, Ore., and 8 percent in Seattle.
Sinclair's wholesale costs, he wrote, were down 4 percent during that period, while dropping 18 percent in Denver, 15 percent in Billings, Mont. and 13 percent in Casper, Wyo.
Sinclair, Tesoro and Flying J delivered written responses Friday. Chevron spokesman Dan Johnson said the company expected to respond by day's end. At press time, Shell Oil's response had not been received.
The responses received Friday emphasized that Idaho gas prices are a reflection of supply and demand.
Sinclair spokesman M.C. "Bud" Blackmore noted that the company's wholesale price had fallen by 17 percent as of last Monday. W. Eugene Burden, Tesoro senior vice president for government relations, wrote that over the last year "Boise enjoyed significantly lower prices than the U.S. over the past year." However, local experts have consistently reported that Idaho gas prices are historically higher than the national average.
Wasden, however, is limited in how much further he can go on the wholesale price issue. The Idaho Consumer Protection Act only authorizes the attorney general to investigate retail gas prices, and only during times of a declared emergency.
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Flying J official says if the state tries to regulate gas wholesale prices, Idaho could lose gas supplies
Three out of five Salt Lake City refiners who ship gasoline into the Idaho market responded Friday to Attorney General Lawrence Wasden's demand for an explanation about why Idaho's wholesale motor fuel prices are higher than in other states.
The responses ranged from polite explanations of local market forces to having only one pipeline supplying fuel to Idaho.
One letter from Flying J Inc. also included a blunt prediction that Idaho gasoline supplies would dry up if the state tries to regulate wholesale gasoline prices. Idaho would be in for a surprise if it followed a suggestion that the Idaho Public Utilities Commission regulate wholesale prices, wrote Flying J Vice President and General Counsel Barre G. Burgon. He said such a move would only encourage suppliers to sell their products elsewhere."If Idaho attempts to regulate profits out of motor fuels, the fuels will not end up in Idaho," Burgon wrote.
Brett DeLange, head of the attorney general's consumer protection unit, said Wasden would not comment until the remaining two oil companies had responded.
On Sept. 14, with gas prices hovering near $3 a gallon, Wasden wrote to Flying J, Sinclair Oil, Tesoro Corp., Chevron USA and Shell Oil Products asking why their wholesale prices were falling faster in other markets than in Idaho. The wholesale price is what refiners charge retailers for the gas they sell consumers. Retailers in Idaho add a mark-up to cover 43.4 cents in taxes, as well as varying amounts for transportation, delivery and operating costs. The result is the price at the pump.
AAA Idaho reported Friday that the statewide price for self-service regular unleaded was averaging $2.70 a gallon, or 37 cents a gallon more than the U.S. average. The Treasure Valley price was $2.66 a gallon, down 33 cents in the last month, but also 33 cents above Friday's national average.
Wasden gave the companies until today to respond.
The five oil companies operate Salt Lake City refineries that ship gasoline and diesel fuel products into Idaho on the Chevron common carrier pipeline.
In his letter to Chevron USA, Wasden said that between Aug. 10 and Sept. 7 the company«s wholesale price dropped 4.4 percent in Idaho, compared with 15 percent in Phoenix, 10 percent in Eugene, Ore., and 8 percent in Seattle.
Sinclair's wholesale costs, he wrote, were down 4 percent during that period, while dropping 18 percent in Denver, 15 percent in Billings, Mont. and 13 percent in Casper, Wyo.
Sinclair, Tesoro and Flying J delivered written responses Friday. Chevron spokesman Dan Johnson said the company expected to respond by day's end. At press time, Shell Oil's response had not been received.
The responses received Friday emphasized that Idaho gas prices are a reflection of supply and demand.
Sinclair spokesman M.C. "Bud" Blackmore noted that the company's wholesale price had fallen by 17 percent as of last Monday. W. Eugene Burden, Tesoro senior vice president for government relations, wrote that over the last year "Boise enjoyed significantly lower prices than the U.S. over the past year." However, local experts have consistently reported that Idaho gas prices are historically higher than the national average.
Wasden, however, is limited in how much further he can go on the wholesale price issue. The Idaho Consumer Protection Act only authorizes the attorney general to investigate retail gas prices, and only during times of a declared emergency.
Barre G. Burgon. He said such a move would only encourage suppliers to sell their products elsewhere.
"If Idaho attempts to regulate profits out of motor fuels, the fuels will not end up in Idaho," Burgon wrote.
Brett DeLange, head of the attorney general's consumer protection unit, said Wasden would not comment until the remaining two oil companies had responded.
On Sept. 14, with gas prices hovering near $3 a gallon, Wasden wrote to Flying J, Sinclair Oil, Tesoro Corp., Chevron USA and Shell Oil Products asking why their wholesale prices were falling faster in other markets than in Idaho. The wholesale price is what refiners charge retailers for the gas they sell consumers. Retailers in Idaho add a mark-up to cover 43.4 cents in taxes, as well as varying amounts for transportation, delivery and operating costs. The result is the price at the pump.
AAA Idaho reported Friday that the statewide price for self-service regular unleaded was averaging $2.70 a gallon, or 37 cents a gallon more than the U.S. average. The Treasure Valley price was $2.66 a gallon, down 33 cents in the last month, but also 33 cents above Friday's national average.
Wasden gave the companies until today to respond.
The five oil companies operate Salt Lake City refineries that ship gasoline and diesel fuel products into Idaho on the Chevron common carrier pipeline.
In his letter to Chevron USA, Wasden said that between Aug. 10 and Sept. 7 the company«s wholesale price dropped 4.4 percent in Idaho, compared with 15 percent in Phoenix, 10 percent in Eugene, Ore., and 8 percent in Seattle.
Sinclair's wholesale costs, he wrote, were down 4 percent during that period, while dropping 18 percent in Denver, 15 percent in Billings, Mont. and 13 percent in Casper, Wyo.
Sinclair, Tesoro and Flying J delivered written responses Friday. Chevron spokesman Dan Johnson said the company expected to respond by day's end. At press time, Shell Oil's response had not been received.
The responses received Friday emphasized that Idaho gas prices are a reflection of supply and demand.
Sinclair spokesman M.C. "Bud" Blackmore noted that the company's wholesale price had fallen by 17 percent as of last Monday. W. Eugene Burden, Tesoro senior vice president for government relations, wrote that over the last year "Boise enjoyed significantly lower prices than the U.S. over the past year." However, local experts have consistently reported that Idaho gas prices are historically higher than the national average.
Wasden, however, is limited in how much further he can go on the wholesale price issue. The Idaho Consumer Protection Act only authorizes the attorney general to investigate retail gas prices, and only during times of a declared emergency.
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