Fuel price hikes investigated nationwide

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Attorneys general in at least 41 states are investigating the cause of rapid gas price hikes after Hurricane Katrina, though diesel prices seem to have drawn little such official attention.

Gasoline investigations have been launched in Alabama, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin, plus the District of Columbia.

The U.S. House Energy and Commerce Committee began an investigation Sept. 7 into Hurricane Katrina’s impact on the energy market. Committee Chairman Joe Barton, R-Texas, said price controls were not needed, “but I think there may be a need at the retail level to make sure we have adequate enforcement tools to prevent pure price gouging.”

Political leaders in several states discussed ways to battle prices, including suspending fuel taxes. Last week, Gov. Sonny Perdue signed an executive order that Georgia motor fuel taxes, including diesel taxes, would not be collected through Sept. 30. That order must be approved by the state Legislature, which has been convened in special session; the House OK’d it Sept. 8.

West Virginia Gov. Joe Manchin, a Democrat, announced Sept. 8 he would call off for one year an increase in the state gas tax that was to have taken effect Jan. 1, 2006.

States depend on fuel taxes to fund road construction, and most of those funds are pledged years in advance, so many legislators argue that suspending such taxes causes more problems than it alleviates.

Manchin also urged President Bush to support the re-institution of a federal law that expired in 1981, giving the president broader temporary authority to deal with fuel prices and fuel shortages.

In Hawaii, meanwhile, a gas cap law that limits what wholesalers can charge for gas took effect Sept. 1. It does not affect diesel prices and does not necessarily lower gasoline prices, either; it’s intended only to ensure that Hawaiians don’t suffer unreasonable markups compared to consumers in the continental United States. Pegged to average weekly prices in New York Harbor, Los Angeles and the Gulf Coast, the cap rises as those averages increase.

The governors of Pennsylvania, New Jersey, Delaware, Wisconsin and Michigan, all Democrats, have asked President Bush to ensure that oil companies are not profiteering from the crises caused by Katrina. From April to June, the governors said, Exxon Mobil’s net income rose 32 percent, Royal Dutch-Shell’s 34 percent.

In the joint letter, the governors asked Bush “to move swiftly to cap corporate oil profits and strictly prosecute any violation of federal anti-trust laws – and take all possible actions to protect Americans against profiteering.”

The National Association of Truck Stop Operators has urged fuel card companies to reduce or suspend their fuel card transaction fees in Katrina’s aftermath.

“Given the rising costs of fuel, transaction fees hit independent operators particularly hard because they are paying fuel card companies a percentage of the fuel transaction amount,” said Lisa Mullings, NATSO president and CEO. “As fuel costs increase, a location’s costs increase as well, which they have to pass on to the consumer.”

Oklahoma voters are likely to be influenced by post-Katrina prices as they face a Sept. 13 special election to consider a fuel tax increase of 8 cents per gallon for diesel and 5 cents per gallon for gas. The state currently taxes diesel at 14 cents per gallon and gasoline at 17 cents per gallon, so the proposed increases would mean truckers no longer would get a break, but would pay the same state taxes as four-wheelers.