Alaska News

Bills would protect Alaskans from excessive fuel prices

Alaskans are paying far too much for heating and motor fuel. Prices have remained high in Alaska even as prices have plummeted in the Lower 48. All across the country, families and businesses are struggling due to the recession, and Alaskans are suffering just as badly because we have the highest fuel prices in the nation.

Alaskans have rightly wondered why this is, since most of the oil comes right from Alaska -- we don't have to ship the oil thousands of miles to be refined -- and we have the lowest gasoline taxes in the nation: zero.

Separate independent investigations have shown that Alaska's high prices are caused by abnormally high prices charged by Alaska's oil refineries to retailers. The attorney general found that there was no real competition between the two major state refineries, and that the refiners are essentially able to charge whatever they want. Alaskans and Alaska businesses need protection from fuel price gouging now.

That is why we have introduced bills prohibiting refineries from charging excessive or exorbitant prices for gasoline, diesel, airplane fuel or heating oil. This legislation will help reduce the cost of fuel in Alaska.

Most Alaska motor fuel and heating oil is produced by the Tesoro and Flint Hills refineries, with most motor fuel coming from Tesoro. While it is understandable that fuel prices will rise and fall with the price of oil, the margins Alaska's main refiners are adding to their cost for refined Alaska crude oil have risen even when oil prices have fallen.

Our legislation does not set or control pricing, it merely prohibits excessive prices. Alaska has a unique constitutional responsibility to ensure that our natural resources are used to the maximum benefit of the Alaska people. It is certainly not to the maximum benefit of Alaskans to allow refiners to charge exorbitant prices to Alaskans and Alaska businesses for fuels produced from Alaska oil.

The recent economic crisis has shown that high fuel costs alone can be enough to create an economic emergency. Not only have Alaska communities, both urban and rural, suffered greatly because of the high fuel prices, but the extraordinarily high prices also make Alaska a less attractive place to do business.


Some say we should allow the refiners to charge exorbitant prices for gasoline to working families so we can subsidize the refiners' jet fuel business. But aren't Alaskans tired of massive corporate subsidies?

Prohibiting price gouging by oil refineries will help protect communities, businesses, families and individuals across the state by giving the state the ability to fight back against excessive and exorbitant prices. Let's take a step now to stop price gouging once and for all by passing this legislation.

Rep. Pete Petersen (D-Anchorage) is a member of the House Energy Committee. Sen. Bill Wielechowski (D- Anchorage) is the co-chair of the Senate Resources Committee and a member of the Senate Energy Committee.