Alaska Attorney General says high gasoline prices not justified

Tesoro counter sues over extent of document requests; also disputes time it would take to provide information

by The Associated Press

Alaska Attorney General Bruce Botelho wants to know why, with the nation’s largest oil field in its back yard, Alaska has the highest gasoline prices anywhere in the United States.

Those high prices can’t be blamed on high taxes, transportation costs, wage and manufacturing costs or a gasoline shortage, the state says in papers filed recently in Superior Court in Anchorage.

The papers reveal a massive investigation Botelho launched earlier this summer into the fuel business in Alaska. His office has issued “civil investigative demands” to eight companies that refine or sell fuel products in Alaska, asking all sorts of questions about their costs, their profits and how they go about deciding what motorists pay for a fill-up.

According to an analysis the attorney general’s office filed in court in early August, Alaska consumers pay on average more for gasoline than residents in any other state, including even Hawaii, which also is investigating prices.

Botelho said his staff huddled early this year when gasoline prices were rising in Alaska even as crude oil prices were sliding down.

“We got to the point where the Alaska paradox became so compelling that I authorized the issuance of subpoenas,” he said Aug. 8.

Tesoro sues over document request

Tesoro, based in San Antonio, Texas, has a refinery north of Kenai and dozens of gas stations and convenience stores around Alaska. Most of the gasoline consumed in Alaska is produced by Tesoro and Williams Alaska Petroleum Inc., formerly known as Mapco Alaska Petroleum.

Earlier this year, Dan Zobrist, an economist with the state Division of Oil & Gas, said his study of gasoline pricing showed that Alaska gasoline refiners, wholesalers and retailers mark up their prices more than their counterparts elsewhere on the West Coast, where most North Slope crude oil is delivered.

Zobrist also found that Alaska gas prices rise almost simultaneously with oil prices, but tend not to fall when crude prices drop.

The attorney general has given Tesoro 46 “investigative demands” for information. Among them, all purchase and sale contracts in Alaska, monthly profit and loss statements for refineries and documents discussing bonuses, awards or commendations for refining and marketing profits realized in Alaska.’’

Tesoro attorneys, in the suit against the state, complain that the document request overreaches legally and that the company would need more than the 30 days allowed under Alaska law to compile the information.