Governors ask probe for possible gas-gouging

Wed., Sept. 21, 2005

Todd Richmond Associated Press

MADISON, Wis. – Gov. Jim Doyle and seven other Democratic governors, including Washington’s Christine Gregoire, sent a letter to President Bush and congressional leaders Tuesday demanding Congress investigate possible gas-price gouging in the wake of Hurricane Katrina and refund any ill-gotten profits to consumers.

The letter cited a study by University of Wisconsin-Madison economist Don Nichols that found the hurricane was not fully to blame for high gas prices.

The study estimated that for pump prices to reach $3.00 a gallon, the price of crude oil would have to be about $95 a barrel.

Currently, however, crude prices have been holding at around $65 a barrel, and Katrina hasn’t led to a surge in crude oil prices, Nichols said.

Doyle told reporters the state Department of Administration estimates Wisconsin consumers have been overcharged $88 million this month.

According to department estimates, the average price of gas in Wisconsin in August before Katrina hit was $2.50 a gallon.

The average price of gas for September is estimated at $2.90.

The agency forecasts that consumers will purchase 222 million gallons of gas in September.

The number of gallons multiplied by the difference in the average price between August and September — about 40 cents — equals about $88 million, said Doyle spokeswoman Melanie Fonder.

Jim Rink, a spokesman for the American Automobile Association, said many factors play into the price of gasoline, such as state gas taxes and retailers who raise prices to drive down demand and preserve low inventories.

He said he would rather see different states’ attorney generals or the Federal Trade Commission start an investigation.

Also signing the letter were Govs. Rod Blagojevich of Illinois; Jennifer Granholm of Michigan; Ted Kulongoski of Oregon; Bill Richardson of New Mexico; Brian Schweitzer of Montana; and Tom Vilsack of Iowa.

White House spokesman Allen Abney said no one has seen the letter yet, but Bush won’t stand for price gouging and has asked Attorney General Alberto Gonzales to handle any such allegations.

“The president has said there should be zero tolerance for people breaking the law during an emergency such as this, including looting and price gouging at the gas pump,” Abney said.

A message the Associated Press left at the U.S. Department of Justice wasn’t immediately returned. Neither were messages the AP left at Senate Majority Leader Bill Frist and House Speaker Dennis Hastert’s offices. Both are Republicans.

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are tax deductible.

Meet Our Journalists

Jesse Tinsley

Meet Jesse Tinsley. As a certified drone pilot, this veteran Spokesman-Review photographer often can be seen capturing beautiful aerial photographs of our region. Sometimes though, the job requires getting down with the dogs.
Jim Meehan

Jim Meehan is no stranger to Zag Nation. As the lead writer covering the Gonzaga men’s basketball team, he tells the stories behind the game and gets fans a bit closer to their favorite players.
Molly Quinn

There is no artist in Spokane like Molly Quinn. Her whimsical style is instantly recognizable to readers of The Spokesman-Review. She has painted gorgeous illustrations that instantly elevate the journalism accompanying it. She brings to life the stories that defy photography. She makes our pages better.
Rob Curley

Spokesman-Review editor Rob Curley loves to talk with people and learn about their lives, whether it's a best-selling author or a stranger he meets downtown on his walk to lunch. It's that inquisitive nature combined with a playful sense of storytelling that helps make our newspaper different than most.