No sign of price fixing

Our views

The Olympian • Published April 25, 2008

Record-setting prices at the gasoline station pump can’t be blamed on price-fixing by the oil companies.

That’s the conclusion of a yearlong investigation of gasoline prices dating back to 2000 and conducted by the state Attorney General’s Office.

The probe was the most comprehensive look since 1991 at gasoline prices in the state, which are the highest in the nation. The study also looked for answers to why gasoline prices vary from community to community.

No major conspiracies were discovered. But the investigation does help to remind motorists of some of the root causes for the pocketbook pain they’re experiencing at the pump. Those include:

• The price of crude oil historically accounted for about 40 percent of the price of gasoline at the pump in Washington state. With the crude oil price climbing, it now accounts for 60 percent of the pump price.

• The state has the highest gasoline tax in the nation, depending on it to fund construction and maintenance of state highways. Combined state and federal fuel taxes are 54.4 cents per gallon.

• West Coast refineries are running at capacity and can’t meet regional market demand. Petroleum distributors are left to scramble for higher-priced gasoline in the international marketplace.

“The West Coast is a fuel island, separate from the rest of the U.S. domestic market,” noted University of Washington economist Keith Leffler. “So when local supplies aren’t sufficient, petroleum distributors start searching as far as Finland and Saudi Arabia to meet demand.”

Much of the in-state price variation of a few cents per gallon can be traced to the cost of transporting wholesale fuel, the study concluded.

The bottom line: Don’t look for price relief at the pump from state or federal regulators. Money-saving measures are, and will remain, primarily the responsibility of motorists, through purchase of fuel-efficient vehicles, reduced use of their vehicles and heavier reliance on public transportation.

Higher gasoline prices appear to be changing driving habits in this state, according to a recent report by the Sightline Institute, a Seattle-based think tank.

The report found that gasoline consumption per capita in the Northwest is at its lowest level since 1966, an overall decline of about 11 percent. That’s the equivalent of every driver in the region taking a five-week respite from driving in 2007.

Ten years ago, drivers in the Northwest used more gasoline per person than the national average. Today, the per capita consumption in the region is 9 percent lower than the national average.

However, population growth continues to eat away at efforts to reduce overall gasoline consumption.

While higher gasoline prices are painful to the public and certain sectors of the economy, they aid efforts to get people out of their cars, which reduces greenhous-gas emissions and eases traffic congestion.