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Gas Prices Fall 17 Percent in Idaho in Past Month

Posted on: Tuesday, 6 December 2005, 18:00 CST

By Joe Estrella, The Idaho Statesman, Boise

Dec. 6--A 17 percent drop in Idaho gasoline pump prices in the past month won't short-circuit an on-going investigation by Idaho Attorney General Lawrence Wasden into the most recent run-up in prices.

AAA Idaho reported Monday that the statewide average for unleaded regular was $2.14 a gallon, down from $2.58 on Nov. 7, and 2 cents higher than the U.S. average of $2.12.

A month ago, Idaho motorists were paying 20 cents a gallon more than the national average. That spread prompted an investigation by Wasden's office to see why prices were higher in Idaho.

The investigation first focused on suppliers, who for years have used a single pipeline from Salt Lake City to deliver gasoline to southern Idaho retailers. The inquiry shifted to the retailers when Wasden's staff discovered that the "margin" -- the difference between the wholesale price and the pump price -- had remained high in southern Idaho even as wholesale prices fell.

"That's our focus," said Brett T. DeLange, deputy attorney general in the Consumer Protection Division. "It's good to see prices falling, but what prices do now won't impact what we're doing. We're looking at the specific time period after the declaration of emergency (because of the hurricanes)."

DeLange said the investigation has involved gathering retail and wholesale pricing data, consulting with outside experts and interviewing retailers.

Treasure Valley experts said Monday that the monthlong decline in gasoline costs is bottoming out and prices may start rising again soon, albeit on a smaller scale than after Hurricanes Katrina and Rita hampered the nation's Gulf Coast refining capacity.

Crude-oil prices on the New York Mercantile Exchange rose 59 cents Monday to settle at $59.91 a barrel.

Industry analysts predicted even higher oil prices as an expected blast of cold weather in the Northeast drives up heating oil costs.

Indications are that pump prices are ready to move up again.

Charlie Jones, co-owner of 23 Stinker stations in the Treasure Valley, said he had one increase in his wholesale gasoline price last week, sandwiched around two decreases.

He said that usually means gasoline suppliers are testing the market to see what they can charge for their product.

Dave Carlson, spokesman for AAA Idaho, predicted that any upward movement in pump prices will be minor compared to the increases that followed the Gulf Coast hurricanes.

"The market could be poised for a rebound, albeit a minor one compared to when those refineries were down," Carlson said.

Jones said he's confident the attorney general's investigation will show his company did nothing improper.

He met with staffers from Wasden's office last week and said he was impressed with their knowledge of "the dynamics of the industry."

Jones said he tried to emphasize how competition also determines a retailer's price. On any given day, he said, a retailer has to try and match a nearby competitor that is selling gas at a particularly low price.

"So maybe that retailer doesn't take a margin that day," Jones said. "I believe that the attorney general's people left my office knowing that my business practices are ethical, legal and prudent."

Jones noted that before the Gulf Coast hurricanes, gasoline prices already were hovering around $2.50 a gallon because of an increase in worldwide energy demand, mostly in China. The Gulf Coast hurricanes accounted for the rest of the runup in gas, which has since fallen back, he added.

"Barring some world event, we'll hopefully never see anything like that again," Jones said.

The Associated Press contributed to this report.

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Source: The Idaho Statesman, Boise

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