Oil company officials, Crist to talk about gas prices tomorrow

www.sun-sentinel.com By DAVID ROYSE Associated Press Posted February 24 2003, 4:22 PM EST

TALLAHASSEE -- Attorney General Charlie Crist wants to know why gas prices have spiked to an all-time high in Florida, so he will meet Tuesday with representatives of six major oil companies.

Officials from ExxonMobil, BP, ConocoPhillips, Amerada Hess, Marathon Ashland Petroleum, and Chevron Texaco Corp. are expected to meet with Crist individually to discuss the oil industry's role in prices at the pumps. Crist spokesman Bob Sparks said the companies were voluntarily sending representatives and haven't been subpoenaed.

We're at record high prices,'' Sparks said Monday. General Crist has just invited the representatives of these companies to share their perspective on why this is so.''

Crist has also asked the Federal Trade Commission to look into whether Florida gas stations are artificially increasing prices to take advantage of possible war with Iraq. Several gas retailers suggested he should look at the whole industry, not just the stations.

According to the American Automobile Association, Florida's average cost per gallon for regular gasoline on Monday was $1.69, up 19 cents from a month earlier and 56 cents higher than the same time last year. It is the highest average price for gasoline ever in the state.

None of the six companies would comment Monday on what their representatives would tell Crist, although BP spokesman Scott Dean said: ``We always cooperate with these requests for information and we're happy to do so.''

But a petroleum industry economist said basic economics are at work and that a ``perfect storm'' of international factors were driving up the price of gasoline, not any kind of gouging or conspiracy by producers.

A two-month national strike in leading oil producer Venezuela, the potential for a strike in Nigeria, a particularly cold winter, a growing economy, and the prospect of war in Iraq all combined to push crude prices up, said John Felmy, chief economist at the American Petroleum Institute.

``This is simply fundamental supply and demand,'' Felmy said. He said crude oil prices have gone up 29 cents a gallon since November and that gas prices have followed suit, going up about 29 cents a gallon since December. He pointed out that in Florida, the price has actually gone up a little less in that period, about 28 cents a gallon.

We don't set prices on world markets, the market does,'' Felmy said. The cost of producing gasoline has gone up 29 cents a gallon.''