Gregoire, Others Demand Refunds For Alleged Gas Price Gouging

Summary

A study estimated that for gas prices to reach $3.00 a gallon, the price of crude oil would have to be about $95 a barrel.

Story Published: Sep 20, 2005 at 8:27 AM PST

Story Updated: Aug 31, 2006 at 1:04 AM PST

MADISON, WIS. - Gov. Jim Doyle and seven other Democratic governors, including Washington's Christine Gregoire, sent a letter to President Bush and congressional leaders Tuesday demanding Congress investigate possible gas-price gouging in the wake of Hurricane Katrina and refund any ill-gotten profits to consumers.

The letter cited a study by University of Wisconsin-Madison economist Don Nichols that found the hurricane was not fully to blame for high gas prices. The study estimated that for gas prices to reach $3.00 a gallon, the price of crude oil would have to be about $95 a barrel. Currently, however, crude prices have been holding at around $65 a barrel, and Katrina hasn't led to a surge in crude oil prices, Nichols said.

Doyle told reporters the state Department of Administration estimates Wisconsin consumers have been overcharged $88 million this month.

According to department estimates, the average price of gas in Wisconsin in August before Katrina hit was $2.50 a gallon. The average price of gas for September is estimated at $2.90.

The agency forecasts that consumers will purchase 222 million gallons of gas in September. The number of gallons multiplied by the difference in the average price between August and September - about 40 cents - equals about $88 million, said Doyle spokeswoman Melanie Fonder.

Jim Rink, a spokesman for the American Automobile Association, said many factors play into the price of gasoline, such as state gas taxes and retailers who raise prices to drive down demand and preserve low inventories.

He said he would rather see different states' attorney generals or the Federal Trade Commission start an investigation.

Also signing the letter were Govs. Rod Blagojevich of Illinois; Jennifer Granholm of Michigan; Ted Kulongoski of Oregon; Bill Richardson of New Mexico; Brian Schweitzer of Montana; and Tom Vilsack of Iowa.

A message The Associated Press left at the White House press office wasn't immediately returned. Messages The AP left at Senate Majority Leader Bill Frist and House Speaker Dennis Hastert's offices also weren't immediately returned.