Fuels

Wis. Senator Wants Gas Probe

Hansen asks AG to investigate whether refiners are cutting supply

MADISON, Wis. -- With gasoline prices at record levels, a Wisconsin state legislator is calling for an investigation into whether oil companies are taking advantage of consumers to pump up their profits, reported the Milwaukee Journal Sentinel.

State Senator Dave Hansen (D) has asked Attorney General Peg Lautenschlager to find out whether major oil refiners have deliberately cut production to reduce the supply of gasoline and drive up the price.

Average prices in the Milwaukee area hovered near $2.70 a gallon for regular unleaded [image-nocss] gasoline on Monday, although a few Waukesha County stations were charging as much as $2.85, said the report. Other parts of the country are already at the $3-per-gallon threshold.

If this is true, such actions could be in violation of the law, Hansen wrote in a letter Friday to Lautenschlager. He called recent increases in fuel prices outrageous.

Erin Roth, executive director of the Wisconsin Petroleum Council, dismissed Hansen's claims. It would not make sense for oil companies to hold down production, he told the newspaper. With prices this high, you want to make as much gasoline] as you can, because every gallon is profit, Roth said.

Jay Wadd, Hansen's chief of staff, said Lautenschlager has not yet responded to Hansen. Lautenschlager spokesperson Kelly Kennedy told the paper that the AG was reviewing Hansen's letter, but could not say when Lautenschlager would decide whether to open a probe.

In his letter, Hansen cited reports that some oil companies are reaping increased profits on flat or declining production. But Roth said the oil industry is below the U.S. average in profitability, and numerous previous state and federal investigations of price-gouging have turned up no evidence of anything but market forces at work.

Roth and AAA Wisconsin spokesperson Mike Bie said they expect demand to drop after Labor Day, following normal seasonal patterns, which could bring down prices; however, they said, crude oil prices remain unpredictable and could thwart a gas price drop. Also, Roth said, colder weather will bring increased demand for heating oil and natural gas, potentially increasing pressure on refineries.

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