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Tuesday, October 4, 2005 - Page updated at 12:00 AM

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Experts find no evidence of gas gouging

The Associated Press

SEATTLE — There is no evidence that Washington consumers have been victims of price gouging at the gas pump since Hurricanes Katrina and Rita, consumer advocates from the state attorney general's office and the Automobile Association of America told state legislators at a joint House and Senate committee hearing.

"We would be at where we are today if Katrina had never happened," said Tim Hamilton, executive director of the Automotive United Trades Organization, a group that represents gas stations and convenience stores.

Representatives from the petroleum industry said Monday it all boils down to a simple rule of economics: Prices rise when demand exceeds supply.

That's been a growing problem for decades, said Joe Sparano, president of the Western States Petroleum Association, a trade group representing oil companies in Arizona, California, Hawaii, Nevada, Oregon and Washington.

Despite growing fuel consumption nationwide, no new refineries have been built in the United States since 1976, noted Phil Verleger, a California oil economist and the president of the consulting firm PK Verleger LLC.

State lawmakers, who don't convene for the 2006 legislative session until January, called Monday's meeting to get experts' views on all the factors driving gas prices to roughly $3 a gallon — and whether legislation could help drag prices back down.

"Are these prices competitive or are we being gouged? That's the basic question here today," said Rep. Steve Conway, D-Tacoma.

Some consumer advocates have suggested that the oil industry is up to no good.

Tyson Slocum, a research director at Washington, D.C.-based Public Citizen, a public interest group, said oil refiners are making roughly 99 cents on each gallon sold today — compared to about 23 cents per gallon in 1999.

Slocum suggested that state lawmakers consider classifying gasoline as a commodity that the state Utilities and Transportation Commission would regulate to make sure prices are tied to actual costs.

Sharon Nelson, consumer protection division chief at the state attorney general's office, said she's found no evidence that any gas and diesel retailers have conspired to inflate fuel prices in Washington since Hurricane Katrina struck in late August, crippling some oil refineries on the Gulf Coast.

The attorney general's office typically receives about 150,000 consumer complaints a year. Since Katrina hit, Nelson said her office has received eight complaints about gas prices.

Western states get only about 5 percent to 10 percent of their gasoline from the Gulf Coast region, which meant prices have risen less sharply here in recent weeks than in other parts of the country, according to the regional petroleum association.

Copyright © 2005 The Seattle Times Company

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