www.wisinfo.com Posted Mar. 08, 2003 By John Dipko Gannett Wisconsin Newspapers

MADISON — Concern about rising gas prices has sparked a three-state request to look at whether fuel wholesalers and retailers are cashing in on tensions in the Middle East.

Wisconsin Atty. Gen. Peg Lautenschlager and her counterparts in Iowa and Illinois asked the Federal Trade Commission in writing Friday to study whether wholesalers or retailers are raising prices to record highs to take advantage of the situation in Iraq.

The letter to FTC Chairman Timothy Muris notes the American Automobile Association has accused some wholesalers or retailers of coming dangerously close to price gouging.

“I am urging the FTC to take action now to protect Wisconsin consumers,” Lautenschlager said. “While there are complicated factors driving the cost of gasoline, we must draw a clear line between free market fluctuations and out-and-out price-gouging at the pump, which we will not tolerate.”

Gas prices in the Fox Valley average about $1.75 per gallon of regular unleaded.

But Robert Bartlett, president of the Petroleum Marketers Association of Wisconsin, said it appears Lautenschlager’s advisers are unaware of fundamental market forces.

Bartlett said crude oil prices were $36.76 a barrel at the end of February, which is $14.39 more than the $22.37-per-barrel price a year earlier. Tensions in the Middle East and strikes in Venezuela have sent crude oil prices skyrocketing, he said.

“Retailers, just like consumers, are taking it on the chin right now,” Bartlett said. “Many retailers are reporting to me that they’re having a record unprofitable year, and many small retailers are financially very distressed at this point. So we resent any notion being promoted that implies Wisconsin retailers are taking advantage of consumers.”

John Dipko writes for the Green Bay Press-Gazette.

www.qctimes.com Last Updated: 2:27 am, Saturday, March 8th, 2003 By By Times Staff and wire services . The attorneys general of Wisconsin, Iowa and Illinois on Friday all but accused gasoline wholesalers or retailers of possible price gouging “taking advantage of the situation in Iraq by unjustifiably raising prices.” . “Suppliers and retailers should know that we are watching when it comes to protecting consumers at the pump,” Illinois Attorney General Lisa Madigan said. “Many factors affect the very volatile prices of gasoline, however, Illinois will act aggressively should companies cross the line that separates market forces from outrageous profits.

In a letter sent Friday to Federal Trade Commission Chairman Timothy Muris, Madigan, Iowa Attorney General Tom Miller and Wisconsin Attorney General Peg Lautenschlager said the American Automobile Association has said that companies are coming dangerously close to price gouging and has urged those companies to exercise restraint in the coming months. . They urged Muris to examine those markets and asked the agency to help determine whether there are any “price patterns not readily explainable by current market conditions or if the current market conditions are potentially being used as a ‘cover’ for collusive pricing.” . “We also will be vigilant for any signs of illegal collusion among retailers in our own states,” their letter states to Muris. “We have taken legal action in the past and certainly will do so again if there is any sign of such anti-competitive practices.” . In the Iowa Quad-Cities, a gallon of regular unleaded gasoline was selling Friday for an average price of $1.65, according to a report issued by AAA and the Oil Price Information Service, or OPIS. Mid-grade was selling for $1.74 and premium was going for $1.82. . But many factors figure into the much higher prices today. . A year ago — before the national strike in Venezuela cut that OPEC country’s oil production to a trickle; before war fears with Iraq; low U.S. stocks of crude oil and gasoline, and before a spike in natural gas prices that refineries use to run their operations. . The U.S. Department of Energy, or DOE, has said that despite rising prices, demand for gasoline continues to rise. The annual increase currently is at a rate of 2 percent. . Half of the more than 17 million barrels of oil used by the U.S. daily goes to gasoline, while another 25 percent goes to make diesel and jet fuels to transport products and people, according to the DOE. . Many parts of the country already have been paying $2 or more at the pump for a gallon of gasoline. Prices increased nationally this week to an average of $1.68, 54 cents higher than a year ago. The $1.76 a gallon average nationally forecast for April would be a nickel more per gallon that the record high of $1.71 set in May 2001, according to the Energy Information Administration, or EIA. . Even so, the EIA said those prices are a bargain compared to prices in 1981 if inflation were factored in. Using today’s dollar, drivers were paying the equivalent of $2.90 a gallon in March 1981, EIA officials said. . In 2001, then-Illinois Attorney General Jim Ryan cited dozens of gasoline stations, including some in the Quad-City region, with price gouging on Sept. 11, 2001, after terrorists attacked the United States. . He said at the time that people were charged prices of $4 to $5 per gallon Sept. 11. He called the price increases “unconscionable.” . The city desk can be contacted at (563) 383-2245 or newsroom@qctimes.com.

www.nola.com Saturday March 08, 2003 By John M. Biers Energy writer

If gasoline prices seem higher than ever before, that's because they are.

Louisiana is one of more than a dozen states that have reached historic highs in recent weeks in terms of prices at the pump. The average price around the state Friday was $1.60 per gallon of regular, up from $1.50 a month ago, according to AAA's Louisiana chapter.

It's a high gasoline prices have maintained since Feb. 20, when they topped the previous peak of $1.58 set in May 2001, AAA spokesman Don Redman said.

Economists are increasingly worried about the impact of high gasoline prices as part of a broader energy crunch that already has produced record-setting natural gas prices and unusually high crude prices. Crude closed Friday at $37.78 on west Texas intermediate, compared with $23.71 one year ago. Natural gas closed at $7.43, compared with $2.73 last year.

If not abated, the high gas prices will curtail driving this summer, Redman predicted. But the association continued to see brisk business last week from Carnival-weary locals who fled the city for Disney World and other destinations.

"It doesn't appear yet that we've seen people dramatically change their lifestyle," Redman said.

Frank Goloforo, owner of Big G's Trash Hauler in Kenner, said he was rankled by the increase.

"It's disgusting," said Goloforo, who is paying $1.83 per gallon for diesel. "I should be paying $1.40."

High gasoline prices, the subject of a front-page story in Friday's Wall Street Journal, have also revived interest in energy on Capitol Hill. Although the top concern in Washington remains the possible war in Iraq, energy has risen as a priority in recent weeks, said Ken Johnson, a spokesman for House Energy Committee Chairman Rep. Billy Tauzin, R-Chackbay.

"It's a problem that could become a crisis overnight," Johnson said.

Though the natural gas price spike has been partially caused by cold weather this winter, the rise in gasoline prices is primarily linked to geopolitical events of recent months.

Venezuela, one of the United States' top sources of foreign oil, essentially ceased production for several weeks this year during a strike directed at President Hugo Chavez. Energy experts say it may take months for the South American country to fully restore production.

The energy markets also have been spooked by the potential U.S.-led war against Iraq. Although Iraq itself represents a small percentage of world oil production, the fear is that a military conflict could destabilize the oil-rich region. This anxiety has helped drive up crude prices, which has in turn discouraged U.S. refiners from purchasing oil, which has led to an erosion of U.S. gasoline supplies.

The high prices have sparked renewed calls in Washington for President Bush to release oil from the Strategic Petroleum Reserve. The administration continued to say Friday that it would authorize a release only under a "severe price disruption," a Department of Energy spokesman said.

Johnson said Tauzin agrees with Bush's restraint on tapping the reserve but that Bush needs to state clearly that he will take action if such a disruption occurs. "Just the promise he would release the oil would calm things down a bit," Johnson said of the financial markets.

Tauzin plans to advance an energy bill in coming weeks, with the House expected to take up the bill before the spring recess. The timetable is less certain in the Senate. Despite 18 months of activity, the energy bill died last fall when the two chambers could not agree on electricity legislation, drilling in Alaska and various other issues.

Bill Wicker, a spokesman for the Democratic staff of the Senate Energy Committee, said high energy prices continue to lag behind Iraq and the North Korean crisis as legislative priorities.

"It's definitely heating up, but it's not at full boil yet," Wicker said of energy. . . . . . . .

John Biers can be reached at jbiers@timespicayune.com or (504) 826-3494.

www.pantagraph.com Saturday, March 8, 2003 By Eric Freehling Business editor

BLOOMINGTON -- Gasoline prices across the state have reached a record high for March, but prices are expected to continue to climb and set record highs for April, too.

The average price for a gallon of unleaded, self-serve gasoline across the state Friday was $1.71, according to Mark Bruno, a spokesman for AAA Chicago. "These are the highest prices we've seen in March since 1974 when we started the survey," he said.

In Bloomington-Normal, prices at the pump were a nickel a gallon higher. An informal survey of Twin City gas stations taken Friday afternoon showed the average price for a gallon of regular, unleaded gas was $1.76.

Bruno said a year ago, the average price of gasoline was $1.23 a gallon.

A month ago, the average price was $1.51.

The attorneys general of Illinois, Wisconsin and Iowa have asked the Federal Trade Commission to examine whether some gasoline wholesalers or retailers are unjustifiably raising prices.

In a letter sent Friday, Lisa Madigan of Illinois, Peg Lautenschlager of Wisconsin and Tom Miller of Iowa urged FTC Chairman Timothy Muris to have the agency examine the markets in their three states and asked for assistance in determining if there is any evidence of illegal price collusion.

Bruno blamed the price rise the price of crude oil, which hovered around $40 a barrel Friday, and on increasingly tight supplies of fuel caused as domestic refineries begin production of summer grade fuels that are mandated to go on sale May 1.

Dave Sykuta, executive director of the Illinois Petroleum Council, which represents state refiners and marketers, blamed four factors for the price increase.

He said demand for gasoline is up 3 percent so far this year, while at the same time unrest in Venezuela has disrupted oil imports from that country.

In addition, Sykuta said, continuing cold weather in New England has delayed refineries' changeover from home heating oil to gasoline, and the cost of crude oil is fluctuating from $37 to $40 a barrel because of "fear and anxiety about what may or may not happen in the Middle East."

The federal Energy Information Administration said by the end of February, gasoline inventories moved toward five-year lows, which is one of the reasons current pump prices are high.

The fuel crunch is caused, Bruno said, because refineries must begin producing reformulated gas that must meet clean air standards while continuing to produce winter-grade gasoline.

"There are 14 blends of reformulated fuel. It cuts into production time because the refineries just don't have enough capacity to meet the increased demand," he said.

Along with the Iraq situation, Bruno said, "Unfortunately, we've got a number of different things conspiring against us, and it's fair to say we're not going to see prices go down anytime soon."

In fact, the federal Energy Department predicted gasoline prices will reach a record national average of $1.76 a gallon in April.

The EIA said pump prices will remain around $1.70 a gallon during the summer driving season.

"It's really difficult to say when we are going to get any price relief," Bruno said.

Sykuta said it was pointless to forecast gas prices.

"A lot of things could change between now and summer to make it better or worse," he said.

Saturday, March 8, 2003 By Rick Haglund Detroit Bureau

DETROIT -- You love your gas-guzzling SUV. But you hate the possibility that you may be supporting Arab states linked to terrorism every time you gas up.

Can you avoid buying gasoline refined from Middle Eastern oil? Although a widely distributed e-mail claims you can, government and petroleum industry officials say the information is a mixture of erroneous statistics and misleading conclusions.

The e-mail, which cites data purportedly from the U.S. Department of Energy, says that oil companies Citgo, Sunoco, Conoco, Sinclair, BP/Phillips and Hess do not import oil from the Middle East.

Major importers of Arab oil, according to the e-mail, are Shell, Chevron/Texaco, Exxon/Mobil, Marathon/Speedway and Amoco.

"Keep this list in your car; share it with friends. Stop paying for terrorism," the e-mail says.

Energy Department officials say the listings are misleading. Some of the companies the e-mail claims don't import oil from the Middle East do, in fact, get oil produced in Saudi Arabia and other Arab countries.

But here's the bigger problem with attempting to boycott companies that import Middle Eastern oil: Virtually all brands of gasoline sold in Michigan are mixed together in the same pipelines and storage facilities.

"It's a fungible product. It gets co-mingled," said Mark Griffin, president of the Michigan Petroleum Association, which represents gasoline wholesalers and retailers.

In other words, you could dutifully buy gasoline from Sunoco, as the e-mail suggests. But the Sunoco gas could actually have been refined from crude oil imported from the Middle East by Amoco.

"It's very difficult to know where crude oil comes from," said Bill Bush, a spokesman for the American Petroleum Institute, which represents oil companies in Washington, D.C.

Griffin said the difference in various brands of gasoline is in the additives put in the fuel just before it's delivered to retail outlets. The additives reduce engine knock, clean engine parts and perform other functions, he said.

"It's virtually impossible to say at retail that gasoline comes from Venezuela, Saudi Arabia or any other country," Griffin said.

The Energy Department has a Web site (www.eia.doe.gov) that provides information about imported oil. And the American Petroleum Institute refers people to a Web site (www.snopes2.com) that debunks "urban legends." The Web site says its top search is for information concerning the e-mail about Middle Eastern oil.

Contact Rick Haglund at (248) 540-7311 or e-mail him at rhaglund @boothnewspapers.com.