Why are Lake Chelan gas prices so high? Good question. Even though they have started to come down a small amount, the fact is that they are still 13 cents a gallon higher Than Wenatchee only 30 miles away. Suspicion of market rigging has hit home for many Chelan residents. I myself bought premium grade gasoline in Wentchee today for $4.19 Gallon, and came back to see it at $4.53 a gallon in Chelan. It doesn’t take rocket science to know that that 33 cents a gallon is going somewhere and being manipulated.
An article in the Portland Orgonian by Joseph Rose, and posted on Oregonlive.com has really gone right to the root of the problem.
Joseph Rose cited a report by Robert McCullough, the Portland analyst who helped topple Enron over predatory electricity trading a decade ago, has issued a report arguing that gasoline prices should have never reached this spring’s dizzying, budget-draining heights.Oil refinery operators intentionally created a supply shortage in order to charge motorists inflated prices, he contends.
In fact, according to his latest report, (PDF) the companies’ apparent manipulation of West Coast markets added up to a windfall of $48 million a day
Local pump prices near record highs as prices nationwide fall. New report: “Retail gasoline prices would have fallen to $3.51/gallon this week if prices had followed supply costs…actual prices now are $.77/gallon higher than would have been expected”
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) demanded the Federal Trade Commission (FTC) use its regulatory authority to aggressively investigate why Washington state’s gas prices increased to near record highs during the month of May, even as the world price of oil and national average gas prices dropped significantly.
In a letter to the FTC, Cantwell urged the Commission to use its Prohibition on Market Manipulation Rule – authorized by a law Cantwell authored in 2007 – to figure out what’s behind the abnormal prices at the pump. Today, average Washington gas prices are only eight cents lower than the previous record high of $4.35 set on July 6, 2008, when oil was trading at almost $150 per barrel. Today, oil is around $86 per barrel.
“May was a tough month for any Washington state family or business filling up at the pump,” Cantwell wrote in her letter. “That’s money that American families and businesses could be spending at local retail stores, neighborhood restaurants, and other small businesses that create more than two thirds of our nation’s jobs. It is therefore critical that the Commission use its statutory authority aggressively to pursue and remedy any purposeful market schemes or reckless supply allocation decisions that are leading to today’s elevated gasoline and diesel prices in Washington state or anywhere else across the nation.”
Cantwell’s letter also referred to a report by McCullough Research that found Washington state gas prices should have fallen to $3.51 per gallon if prices had followed supply costs. The difference between this price and the actual cost of gas at the pump results in a windfall profit for suppliers of $48 million a day.
McCullough Research was instrumental in uncovering Enron’s manipulation of the West Coast electricity markets. Cantwell’s letter to the FTC asked the consumer protection agency to investigate why retail gasoline prices in Washington state are no longer following crude oil prices like they usually do. You Can Read Her Letter HEREDo you think we’re getting the gas shaft? Let us know what you think on this subject.