Cantwell asks FTC to look at high gas prices in state

  • Thu Jun 7th, 2012 10:27pm
  • News

Associated Press

SEATTLE — Sen. Maria Cantwell, D.Wash., on Thursday asked the Federal Trade Commission to investigate why Washington state gas prices increased to near-record levels in May, even as world oil and national average gas prices declined.

Average Washington gas prices are only a few cents lower than the previous record high of $4.35, set in July 2008, when oil was trading at almost $150 per barrel, the Washington Democrat said in a letter. The price of crude oil dropped below $85 a barrel Thursday.

Cantwell’s letter referred to a McCullough Research report that she says found Washington state gas prices should have fallen to $3.51 per gallon if prices had followed supply costs.

On Monday, the AAA auto club reported the average price of a gallon of gasoline in Washington state was $4.28. That’s up a penny in a week and 20 cents in a month. It was 69 cents higher than the national average.

The national average price of gasoline dropped 17 cents per gallon over the month of May, Cantwell wrote.

In late May, Gov. Chris Gregoire told the state Department of Commerce to monitor rising gas prices in the state and asked the agency to recommend what actions can be taken to help reduce costs to drivers.

The governor sent letters to every refinery in Washington, asking them to take all prudent measures to increase production and supplies sufficiently to reduce costs for West Coast consumers. She said she planned to send similar letters to refineries in California.

Repairs and maintenance to a BP refinery at Cherry Point near Blaine, were completed in May and that refinery has resumed normal operations after a three-month outage blamed on a Feb. 17 fire.

The outage has been cited as one reason that gasoline prices have been higher on the West Coast than the rest of the nation.

The West Coast switches to a more expensive fuel blend in summer to fight pollution but oil analysts have blamed the price spike on the BP refinery outage and maintenance work at several California refineries.

Cantwell referenced the BP fire in her letter, noting it took a significant amount of refining capacity offline.

“But that shutdown alone should not have resulted in the lowest gasoline inventory levels in history unless other West Coast refiners failed to undertake actions that could have made up for the supply shortages resulting from the Cherry Point accident,” she said. “The reasons why six other West Coast refineries simultaneously reduced operations are not well-documented.”

She asked the commission to use its regulatory authority to “ensure that Washington state consumers are not subject to `any manipulative or deceptive device or contrivance’ that could be resulting in unjustifiably high gasoline prices.”

She also directed the FTC to the McCullough Research report, which she said “questions whether today’s historically low gasoline inventories were really just the inevitable result of the BP refinery fire and unfortunately timed refinery maintenance shutdowns.”

“High gasoline prices are contributing to significant economic pain for consumers and businesses in Washington state and are jeopardizing our fragile economic recovery,” Cantwell concluded.