Greed keeps our gas prices high

• But concerted efforts by the Kenai Peninsula tourism groups, drivers could fight back

Since pineapple is grown in Hawaii, purchasing your pineapple shouldn’t cost as much there as it does in, say, California. Or, potatoes in Idaho should be dirt cheap because that’s the state’s claim to fame. Apples from Washington taste great, and it’s smart to buy them from fruit stands along the highway, if that’s where you happen to be traveling.
In Alaska, we are known for producing petroleum, with a large role on the Kenai Peninsula. And we know we pay more for it than just about anywhere else in the nation. This summer’s dishearteningly high price at the pump shows that we continue to suffer some of the highest gasoline costs on the road system.
These high prices don’t just hit us hard at the gas pumps. They also hit our wallets with higher freight charges – which affects a myriad of goods and services we purchase from milk to construction goods. Not to mention a loss of tourism dollars, with tourists choosing to not travel to Alaska by highway, as well as in-state tourists staying home who might come to the Peninsula for a weekend get-a-way.
It is welcome news, therefore, that Sen. Bill Wielechowski is again opening the discussion toward exploring any possible solutions. The Senate Finance Committee approved his request for $150,000 to hire an expert to determine ways to get our gas prices down.
One idea is to have the Alaska Industrial Development and Export Authority build new gasoline storage capacity to enable Outside refiners to bring their lower-cost gasoline into Alaska. The cost of these facilities would be paid off by companies storing gas.
On June 21, the average cost of gas in Anchorage was $4.10. Today it is down to $4.04. The average cost across the United States was $3.49. The state with the lowest average was South Carolina, where drivers paid $3.01 to fill up. In Homer, our price at the pumps is $4.30-$4.39.
Last time oil industry officials were assembled, as the Legislature looked into the matter of pricing, a heap of excuses were piled atop one another, and certain questions were evaded as proprietary information. One excuse commonly heard, was that oil needs to be refined elsewhere and shipped back at a higher cost of doing business. Another myth is that our gas taxes are too high. A third excuse says the state has limited infrastructure to store and move gas.
Not true. The gasoline used from Homer to Palmer is produced locally at the Tesoro refinery in Nikiski. It has a very short distance to travel, resulting in minimal transportation costs. And Alaska has the lowest gas taxes in the nation, Wielechowski wrote.
For example, state gas taxes and fees are 49 cents a gallon in New York, 48 cents a gallon in California and 37 cents a gallon in Washington. In Alaska, we pay 8 cents a gallon. Yet, all of these states have lower gas prices than we do.
The sad truth is that Alaskans are being gouged because of lack of competition, he tells us.
“We’ve tried legislation banning gouging, which dozens of states have done. This would have a significant impact, but the bills died after heavy industry lobbying. So now we’re going to focus on different ways to ease Alaskans’ pain at the pump,” he wrote.
We must be proactive and participate as listeners when the hearings get started and pass in questions to be asked. Take photos of your gas pump prices and encourage friends and relatives in other states to do the same; then let this Senate committee see those photos.
Also, Peninsula tourism companies and individuals could encourage a one-day-a-month moratorium on gas – where motorists avoid the gas pumps en force for one day. Market forces would then prove we aren’t willing to pay these high prices in continued ignorance. Maybe then, gas prices for the Peninsula would become more reasonable and allow us a more affordable cost of living and the freedom to explore this great state at a reasonable price.

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Posted by on Jul 11th, 2012 and filed under Editorial. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Response for “Greed keeps our gas prices high”

  1. guest says:

    This has been done before, they are not really trying to solve the problem so throwing more money at a study will not help. They are afraid we might drive the Koch refinery out of business.

    Report says regulating gas prices not very wise

    RISKY: Such a move could drive refineries out of business.

    Read more here:

    “The 54-page House Judiciary Committee report also warns that any attempt to regulate consumer gas prices risks driving the refineries out of business and severely impacting Alaska’s economy.

    Committee Chairman Jay Ramras, R-Fairbanks, said the committee’s findings are based on intuition after spending four months researching and gathering testimony on the issue.

    “It seems that in order for refineries to maintain their competitive position in the global jet aviation market, they have to shift costs on to a much smaller more fragile consumer retail gasoline market,” Ramras said.

    “We don’t think there’s any illegal activity going on. We think it has to do with two very distinct marketplaces,” he said”.

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