Alaska Drops Gas Price-Fixing Probe

JUNEAU, Alaska -- Alaska's attorney general has dropped a three-year investigation into price-fixing by gasoline companies, prompting sharp criticism from consumer groups.

Attorney General Bruce Botelho conceded that Alaskans pay too much for gasoline, but said interviews with industry officials and the examination of thousands of documents produced "insufficient evidence to pursue antitrust claims."

He would not elaborate on what the investigation found. Many of the records are confidential under state law. Gasoline prices here are among the highest in the nation despite the fact that Alaska is home to the largest oil fields in North America and gets most of its gasoline from in-state refineries, the Associated Press reported.

The price of gasoline in Alaska averages 20 cents per gallon higher than the national average, and 9 cents above West Coast prices. Stephen Conn, executive director for Alaska Public Interest Research Group, blamed the prices on Gov. Tony Knowles, who he said has created a "pro-monopoly" business environment in Alaska. "We have an administration that has proven to be consistently gutless where monopolies are concerned," he said. "Price gouging is real and everybody knows it."

Knowles fought for Federal Trade Commission approval of a deal to allow BP Amoco plc take over Atlantic Richfield Co. in 2000 and a merger between Cars and Safeway, the state's two largest grocery retailers. A spokesman for Knowles defended the state investigation and said it fulfilled the state's role as a "watchdog" for consumers, the report said.

Ron Noel, vice president and general counsel for Tesoro Alaska Co., one of the state's largest gasoline retailers, said he was glad the investigation was over. The Federal Trade Commission in recent years has conducted several formal investigations into gasoline pricing practices in the California and Midwest markets and concluded each time that there was no collusion or violation of antitrust laws.

A recent staff investigation by the Senate Governmental Affairs investigations subcommittee concluded that oil companies, while not colluding, tended to manipulate supplies to keep prices high in tight markets.