SPOKANE – Just why were gasoline prices in Eastern Washington, particularly Spokane, so much higher this summer than prices in Western Washington? U.S. Sen. Maria Cantwell is again pressing the federal government for an answer.
While an initial survey by the U.S. Federal Trade Commission blamed the differences on technical issues related to Rocky Mountain refineries that supply much of Eastern Washington’s gas, Cantwell is not convinced.
“I don’t believe your preliminary analysis went far enough in providing an accurate assessment of petroleum price differentials between Seattle and Spokane,” the Washington Democrat wrote in a letter to the FTC on Friday, asking for another look at the issue.
While gas prices in the Spokane and Seattle markets have historically been about the same, this summer saw prices in Spokane climb much higher. Cantwell said for a time the Spokane market had the highest prices in the Lower 48 states.
In mid-September, while regular gasoline in Western Washington was available for less than $2.70 per gallon, Spokane-area drivers paid an average price of $3.04, Cantwell said.
Prices have since come down. Currently, AAA’s Daily Fuel Gauge Report found that regular gasoline in Spokane sells for an average of $2.54 per gallon, compared to $2.48 per gallon in the Seattle area.
Earlier this week, state Attorney General Rob McKenna told Spokane Mayor Dennis Hession there was little his office could do about the prices.
McKenna said he would investigate the oil and gasoline industry if there was evidence of illegal collusion to maintain artificially high prices.
In the absence of such evidence, the explanation for higher gasoline prices in Eastern Washington may be an economic one, McKenna wrote to the mayor.
On Oct. 19, the FTC said refinery practices and conditions in the Rocky Mountain region were the primary cause of the disproportionately high gasoline and diesel prices in Eastern Washington. Western Washington’s gas primarily comes from other refineries, the FTC said.
In her letter Friday, Cantwell asked the FTC to answer detailed questions on refinery-level market structure, local pricing data, and profit-taking to help find the root cause of the Spokane-area price spikes.
While the FTC concluded that outside supply factors accounted for all of the higher gas prices in the Spokane area, Cantwell wondered if the FTC tested that theory by comparing prices in small rural markets surrounding Spokane, which were observed to have lower prices.
“While I appreciate that there is currently no law or regulation that sets acceptable profit margin or reasonable cost basis in the case of petroleum markets, I believe an analysis of the recent price spikes in Spokane may help to inform us whether any form of manipulative or deceptive device or contrivance is currently being used,” she wrote.
“I understand that gasoline and diesel in Montana and elsewhere fell faster than in Spokane,” she wrote. “What explains these differences within the same supply area?”
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