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AAA to Investigate Delaware Gas Prices

WILMINGTON, Del. -- The American Automobile Association (AAA) Mid-Atlantic is calling for an inquiry into gasoline prices in Delaware, which are significantly higher than the national average, NY Newsday reported.

Following Hurricane Katrina, drivers in Delaware, Maryland, Pennsylvania and New Jersey saw gas prices jump higher than those in every other state except Georgia, the AAA reported. Prices have remained higher than the national average even though demand for gasoline has dropped dramatically since the Hurricane.

"We're disturbed by the numbers we are seeing," said Catherine Rossi, spokeswoman for the AAA, which tracks nationwide gasoline prices through credit card purchases and produces a running average daily.

In the last three years, gasoline prices in Delaware have been at or below the national average for all but few days. Since Hurricane Katrina, prices have been far above the national average, Rossi said in an Newsday report.

Attorney General M. Jane Brady will ask all 400 Delaware gasoline retailers to send the prices that they paid distributors for their gasoline and the price that they charged consumers, spokeswoman Janice Fitzsimons told Newsday.

Oil industry officials say prices spiked in Mid-Atlantic states after Katrina because they get so much gasoline from pipelines supplied by the Gulf Coast. Two pipelines that supply some Mid-Atlantic states were shut down in the days after the storm and only came back on line this weekend, said Ron Planting, an analyst for the American Petroleum Institute.

In Delaware, 70 percent of the gasoline is supplied by the Valero Delaware City refinery, which gets its oil from ocean tankers, not the pipelines mentioned by industry officials. Refinery spokeswoman Mary Jen Beach declined to tell Newsday how managers set their prices, referring questions to Valero Energy Corp., which owns the refinery. A spokeswoman there did not return phone calls, The (Wilmington) News Journal reported. Planting said Delaware might have been affected by the pipeline problems because nearby states could have bid up the price of Valero's gasoline.

Gary Patterson, executive director of the Delaware Petroleum Council, denied that any oil producers engaged in price gouging.

Jeff Lenard, spokesman for the National Association of Convenience Stores said retailers are not gouging consumers. "When gas is $3 a gallon, the retailer is responsible for about 4 percent of the cost, but they are getting 100 percent of the abuse," Lenard said. He said the typical retailer adds about 12 cents a gallon onto the wholesale cost of gasoline.

State Rep. Helene Keeley, said the ongoing high prices justify a bill she is sponsoring to ban price increases of more than 10 percent whenever the governor declares a state of emergency. Keeley accused retailers of running up prices unfairly in the days following Hurricane Katrina. "They increased prices too fast and in my mind that is price gouging," Keeley said.

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