Idaho gets testy refiner response

BOISE – Three Salt Lake City refiners have told Idaho Attorney General Lawrence Wasden that market forces and limited competition are to blame for his state’s high wholesale gasoline prices.

In September, Wasden sent letters to Flying J, Sinclair Oil, Tesoro Corp., Chevron USA and Shell Oil Products asking why their wholesale prices were falling faster in other markets than in Idaho. Chevron USA and Shell Oil Products officials had not yet responded, the Idaho Statesman reported.

The letter from Flying J Inc. included a prediction that Idaho’s gasoline supplies would dry up if the state tries to regulate wholesale gasoline prices. Flying J Vice President Barre Burgon said that if the state followed the regulation suggestion from the Idaho Public Utilities Commission, suppliers would be encouraged to sell their products elsewhere.

“If Idaho attempts to regulate profits out of motor fuels, the fuels will not end up in Idaho,” Burgon wrote.

Brett DeLange, head of the attorney general’s consumer protection unit, said Wasden would not comment until the remaining two oil companies had responded.

When Wasden sent the letters to the companies, gas prices were hovering near $3 a gallon. On Friday, AAA Idaho reported the statewide price for self-service regular unleaded was averaging $2.70 a gallon – 37 cents more than the national average. Prices in the Boise region were about $2.66 a gallon.

In his letter to Chevron USA, Wasden said that between Aug. 10 and Sept. 7 the company’s wholesale price dropped 4.4 percent in Idaho, compared to 15 percent in Phoenix, 10 percent in Eugene, Ore., and 8 percent in Seattle.

Sinclair’s wholesale prices dropped about 4 percent in Idaho during that period, compared to 18 percent in Denver, 15 percent in Billings, Mont., and 13 percent in Casper, Wyo., Wasden said.

Sinclair spokesman M.C. “Bud” Blackmore said the company’s wholesale price had fallen in Idaho by 17 percent as of last week. Tesoro Vice President W. Eugene Burden wrote that “Boise enjoyed significantly lower prices than the U.S. over the past year.”

Wasden may not be able to do much else to investigate the price differences. The Idaho Consumer Protection Act only allows the attorney general to investigate retail gas prices during a declared emergency.