Attorney General Releases
Gasoline Pricing Report
February 12, 2009
Alaska Acting Attorney General Rick Svobodny released the results
of a gasoline pricing investigation that has been underway since
August of 2008. The report concludes that the higher prices
Alaskans pay for gasoline is the result of unique market conditions
in Alaska, which include few participants, small volumes, and
limited threats of competition from outside sources.
The higher than normal gasoline prices experienced during the
later half of 2008, when prices around the country dropped everywhere
except Alaska, were largely the result of these market conditions
coupled with unprecedented volatility in the crude oil prices.
Oil rose to record high levels of $144 a barrel in July, 2008,
and then dropped by over $100 a barrel to under $38 in just six
The Department of Law reviewed information from retailers, distributors
and refiners and found no evidence that gasoline prices were
the result of illegal activity, such as price fixing or collusion.
Alaska does not regulate gasoline pricing, and there is no price
gouging law that limits the amount of profit a business can make.
Like any other consumer good, the price for gasoline is set
by supply and demand conditions in the marketplace.
In larger market areas like Seattle, where there is more competition
for gasoline sales at the wholesale level, gasoline prices typically
fall more quickly than in more concentrated markets. Following
an unprecedented drop in crude oil prices, it was not surprising
that Alaska's prices lagged behind prices in other areas of the
Pacific Northwest. Over the last couple of months, the spread
between Anchorage and Seattle prices has narrowed significantly.
Prices in Juneau last week were below average street prices
Information available for Anchorage and Fairbanks indicates that
retailers are not the cause of higher prices. Retail margins
have stayed at or below margins typical of stations in the Lower
48. The attorney general's recommendation includes continued
monitoring of gasoline prices.
The last investigation of gasoline pricing was completed in 2002
and spanned three years. The result of that investigation also
found no evidence of illegal activity.
The state retained the services of Econ One, a Los Angeles-based
economic consulting firm, to assist in the investigation and
the preparation of the report.
On the Web:
Download the Gasoline Pricing
Source of News:
Alaska Department of Law
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