If the buck stopped here in Maine, the state might be in a better position to look further into the causes behind the recent spike in petroleum prices that have adversely affected Maine residents, the state’s top prosecutor indicated Thursday.
But the exorbitant profits resulting from the recent price surge remain outside Maine, beyond the reach of state investigators, according to Maine Attorney General Steven Rowe. For this reason, Rowe is calling for a federal investigation of the national and international markets that have contributed to the volatility of oil and gas prices.
“I am convinced that the time has come for the federal government to commission an independent, professional, in-depth study of these markets,” Rowe wrote Thursday in a letter to Maine’s congressional delegation. A nascent study by the federal Government Accountability Office into market oversight “may present a unique opportunity to obtain recommendations on how our nation can best respond to this crisis,” he added.
Maine is not alone in having to deal with gas prices that have risen significantly in recent months, especially since Hurricanes Katrina and Rita damaged oil refineries along the Gulf Coast at the end of August.
In a letter sent Wednesday to the head of the Federal Trade Commission, the National Association of Attorneys General Antitrust Committee indicated 45 states are investigating the rise in oil prices and that the prosecutors’ group is “ready to assist you to investigate the cause of the escalating fuel costs.”
Maine Assistant Attorney General Charles Dow said Thursday that the state has received close to 100 complaints about price gouging at Maine gas stations over the past six weeks. He said all the complaints have been considered and that none has led to price-gouging charges being filed against retailers.
Rowe’s letter, however, is not a sign that the state attorney general has ended its investigation of gasoline pricing in Maine, Dow said.
“We don’t mean to say there are no irregularities at any [gas stations] in Maine,” Dow said.
In the letter, Rowe specifically cites three factors that likely have contributed to the volatile prices of oil and gas:
. Lenient rules and oversight at the New York Mercantile Exchange, which is where petroleum futures are traded among oil companies, speculators and hedge funds.
. Lack of regulation of oil transactions that are not conducted through NYMEX.
. Consolidation of ownership in the oil industry over the past eight years.
Mergers among major oil refining corporations reduced their number from 15 in 1997 to seven in 2002, according to Rowe. He indicated that even as recently as Sept. 7, after Hurricane Katrina struck the Louisiana and Mississippi coasts with 145-mph winds, the FTC approved the acquisition of oil refining company Premcor by Valero, creating the largest oil refining company in the United States.
“It seems like a problem,” Dow said of the decreasing number of companies in the oil refining business.
According to AAA’s online Fuel Gauge Report, the average price in Maine on Thursday for a gallon of low-octane, unleaded gasoline was about $2.75, or roughly 75 cents higher than it was one year ago. In the days after Hurricane Katrina made landfall near New Orleans on Aug. 29, prices in Maine shot up roughly 50 cents to more than $3 per gallon before they receded again.
As of Tuesday, the average price in Maine for home heating fuel was $2.54, according to the state Web site maineenergyinfo.com. This price is 42 cents higher than the average price at the end of March and 70 cents higher than the average price a year ago.
Dow said prices in Maine have receded more quickly than they have in other states. One month ago, referring to “prices that jackrabbit up [and] then snail down,” Rowe strongly encouraged retailers to reduce retail prices as fast as wholesale prices allowed.
“On behalf of consumers, I am grateful to Maine retailers who stood by their customers and led prices down to levels below regional averages,” the attorney general wrote in Thursday’s letter.
In response to Rowe’s letter, Sen. Susan Collins said in a prepared statement that she is “extremely concerned” about high energy prices. Effective market oversight, immediate increases in supply, energy conservation measures, assistance to low-income families and a long-term energy strategy all are needed to address the issue, she said.
“I have been working closely with GAO on energy issues and am following their energy market oversight study closely,” Collins said in the release.
Though heating fuel costs have increased significantly, federal funds for the Low Income Home Energy Assistance Program (LIHEAP) have not increased, prompting Collins and other members of Maine’s Congressional delegation to call for the release of more federal assistance money.
Antonia Ferrier, a spokeswoman for Sen. Olympia J. Snowe, said the senator was “acutely aware” of the need for energy price relief for Maine consumers. She will watch for the results of the GAO study
Comments
comments for this post are closed