Report: Fuel distributors not gouging rural customersPublished on February 25th, 2010 By ALASKA NEWSPAPERS STAFF
Fuel prices in Alaska's small rural places are very high-and a lot of Alaskans wonder what's keeping them so high, even though crude oil prices were generally lower in 2009, according to a written statement from the Institute of Social and Economic Research. A new study by Ginny Fay, Nick Szymoniak, and others describes the complex system for getting fuel to remote places. They find that - contrary to what many Alaskans believe - there's no single thing that makes prices so high. Instead, many things add up to drive prices: • It doesn't appear that fuel distributors operating in Western Alaska are charging excessive prices to deliver fuel to communities. • Fuel distributors in rural coastal areas (from Southeast to the Aleutian Islands) are in a position to set higher prices-because they frequently also own retail stores in communities. But a new analysis by the Alaska Department of Law (www.law.state.ak.us) finds distributors are not using that power to increase prices. • Several things suddenly converged to push prices up in Western Alaska, including crude oil prices that are still higher than several years ago; price recovery among fuel distributors, after earlier competition pushed prices below sustainable levels; the need for distributors to replace aging equipment and acquire double-hulled tankers; and construction of new tank farms in many communities. Alaska Newspapers Staff can be reached at editor@alaskanewspapers.com |
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The Tundra Drums is a publication of Alaska Newspapers, Inc. This article is © 2010 and limited reproduction rights for personal use are granted for this printing only. This article, in any form, may not be further reproduced without written permission of the publisher and owner, including duplication for not-for-profit purposes. Portions of this article may belong to other agencies; those sections are reproduced here with permission and Alaska Newspapers, Inc. makes no provisions for further distribution.