Washington

Tough Questions and Straight Answers
About Washington Gasoline Prices

WSPA realizes that consumers have asked a lot of tough questions lately about gasoline prices. We welcome those questions and offer the following information to help foster a healthy public dialogue on these issues.

What’s going on with gasoline prices?
According to the United States Energy Information Agency (EIA), gasoline prices are increasing nationwide. EIA reports that the main reasons for this are higher crude oil prices pushed by fears of a war in Iraq and slow recovery in Venezuelan imports, plus other supply/demand factors.

Why are gasoline prices so high in Washington State?
According to AAA, the average price for unleaded regular in Washington as of March 7 was the fifth lowest in the six Western states, and was below the Western states average. The EIA has reported that prices are generally higher in the Western states, observing that production costs and refinery investment per barrel are higher in the West.

Are refiners making disproportionate profits on these high gas prices?
The EIA, in a report dated March 12, 2003 asked the question: “Do current prices for petroleum products, particularly gasoline, reflect gouging? In EIA’s estimation, the answer is ‘no’.” This is consistent with previously reported EIA findings that “there is adequate competition on the West Coast,” and “refiner/marketers cannot extract higher profits from consumers.”

How do gasoline prices compare to the costs of other products?
According to the US Bureau of LaborStatistics, which reports the Consumer Price Index (CPI), gasoline prices have risen far less than many other products we use every day, including electricity, food, housing and medical care.

Haven’t oil companies been investigated?
Some 25 state and federal investigations have been conducted, all concluding there is no evidence of wrongdoing. The most recent investigation was a 3-year inquiry by the Federal Trade Commission, which concluded in May, 2001. It gave the oil industry a clean bill of health, finding no illegal activity or violation of anti-trust laws by refiners.

What’s being done right now to protect consumers?
Recently, the FTC stepped up its oversight by initiating daily gasoline price monitoring to guard against pricing irregularities. And the EIA has a toll-free hotline for consumers to report suspected gasoline price gouging, at (800) 244-3301.

Western States Petroleum Association
111 Market Street NE, Suite 325, Olympia, WA 98501 (360) 352-4506

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