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FOR IMMEDIATE RELEASE
September 01, 2005
McKenna Says Consumers Should Prepare for Hurricane Katrina’s Potential Impact on Washington Gas Prices


SEATTLE – Attorney General Rob McKenna said it’s too soon to tell how Washington will be impacted by the damage Hurricane Katrina caused to Gulf refineries, but warned drivers that the state has a limited ability to regulate gasoline prices.

“We don’t know yet how Washington will be affected by Hurricane Katrina, but drivers here could be hit with higher prices despite the fact that we receive our petroleum from refineries outside the Gulf of Mexico,” McKenna said. “In some ways, we are in better shape than other states that rely on that region for fuel. But the economic forces of supply and demand apply to gasoline just as they do other products and services.”

With gas prices at an all-time high, McKenna said drivers on a budget should explore public transportation, carpooling and other commute options.

“Concerned drivers need to know that the state has no authority to stop companies from charging higher gasoline rates unless there is a violation of anti-trust or consumer protection laws,” McKenna added.

Washington has five refineries that supply Western Washington and parts of Oregon. The state receives most of its crude oil and natural gas from Alaska.

Crude oil is traded on a worldwide market that determines prices in all areas. Washington refineries mostly use Alaskan North Slope crude, but shortages of one type of crude oil may lead to price increases of other types. So although Washington has sufficient crude oil supplies, rates here can be affected by an anticipated shortage elsewhere.

In addition, neighboring states that have historically relied on the Gulf region for petroleum may seek to purchase from Washington refineries.

Nine refineries in the Gulf are now closed and pipelines there may be damaged, thus impacting supply and distribution.

“All of these factors – reduced crude oil supplies, competition among refineries, and a drop in production and distribution capacity – affect the market,” McKenna said.

Washington State has no laws that prohibit price-gouging; past efforts to pass such laws were unsuccessful. Gasoline is not a regulated commodity. Consequently, producers and retailers are free to charge whatever price they choose, so long as they do not conspire, or engage in unfair or deceptive business practices.

The Attorney General’s Office provides information about gas prices on its web site at http://www.atg.wa.gov/consumer/gasprices.

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For more information contact:
Kristin Alexander, Public Information Officer, at (206) 464-6432, kristina1@atg.wa.gov

 

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