Attorney General asks oil companies to lower their prices

www.floridatoday.com Mar 18, 9:41 PM By Wayne T. Price FLORIDA TODAY

U.S. oil companies should roll back prices to Jan. 1 levels because of the economic strain rising fuel prices are causing consumers, Florida Attorney General Charlie Crist said Tuesday.

Crist, in Washington for the annual meeting of the National Association of Attorneys General, made his request in a letter to six oil companies.

In Florida, that would mean gas at about $1.50 a gallon for regular unleaded vs. the current average price of $1.722.

"Consumers are losing the ability to break even, and those consumers include many of your employees or retired employees," Crist said in his letter to the oil companies.

A copy of Crist's letter to Lee Raymond, chairman and chief executive of Exxon Mobil Corp. was posted Crist's Web site, www.myfloridalegal.com. A representative for the Irving, Texas-based Exxon Mobil was unavailable for comment Tuesday.

Crist and several other chief law-enforcement officers of the nation's states have been questioning the quick rise of gasoline prices during the past few weeks. Most analysts have blamed uncertainty about military action in Iraq as the cause of the price increase.

But other factors also are at work, including a strike in oil-producing Venezuela, a harsh winter in the Northeastern United States and problems at oil refineries.

Crist said those conditions have changed. Venezuela has worked to end the strike and is producing 3 million barrels of oil a day. Also, temperatures in the Northeastern states have moderated.

And while there still may be uncertainty about what will happen with oil production in Iraq, the price of oil plunged 9 percent Tuesday, falling to its lowest level in more than two months. The April futures contract fell $3.26 to $31.67 a barrel on the New York Mercantile Exchange, the lowest close since Jan. 8.

"If these factors are genuine factors, as it relates to the rationale for raising prices, then it would be my hope they are genuine factors in the rationale to lower the price of fuel," Crist said from Washington.

Crist said he didn't expect a response from the oil companies for several days. He also added he didn't believe price-gouging was taking place in Florida, "but I can tell I received hundreds of calls from across Florida from people who are concerned about that issue."

"There is no allegation, and no finding, of price-gouging at this point," Crist said.

Even with gasoline prices at unprecedented levels, U.S. consumers still have it good, said Beck Taylor, the W.H. Smith professor of economics at Baylor University.

"Americans have a long tradition of complaining about gasoline prices, and sometimes rightly so," Taylor said. "But, compared with other countries in the world -- particularly in Europe -- the relative price of gasoline in the United States is low."