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Heating oil prices are once again being updated on a regular basis
Link to PM 2.5 Wood Burning Information
Gas
prices No collusion but no relief You can describe Alaska's gasoline market with that old line about outgunned football teams: We're small but we're slow. The attorney general's report on gasoline prices found no evidence of collusion between the two refiners -- Tesoro and Flint Hills -- that provide most of the gas sold to Alaska motorists. What it did find was a market that isn't lively enough to strike the kind of balance enjoyed in Lower 48 markets. That was never so obvious as in 2008, when Alaska prices rode to the heights with the rest of nation's as oil prices passed $140 a barrel, but were much slower in coming down when oil prices crashed. The cause It's not because retailers are making much more than their Lower 48 counterparts. It's because refiners' margins are much higher here. Alaska refiners are charging more at the wholesale level because they can. Bills in both the Senate and House would deal with that. They would make Alaska wholesale gasoline prices (and some other fuels) illegal if more than 10 percent greater than the Washington state average -- unless refiners could show that their prices were due to reasonable costs "in connection with the refiner's sale of the energy resource." As we see from the attorney general's report, we have a choice: Shrug and pay the price, or treat motor fuels as a public necessity and find a way to replace the effects of vigorous competition with a government-regulated profit. We don't like telling a business it has to limit its profits. But Alaska's gasoline market is too constrained in the refiners' favor and consumers are paying the price and seem likely to pay it for a long time to come. Legislation may be a way to address the high price of fuel in Alaska, but we are wary of a simplistic solution. BOTTOM LINE: Refiners should either show why they need to charge more, or stay within shouting distance of Washington prices. HB 68
00 HOUSE BILL NO. 68 Fairbanksgas.com Official Energy Savings FAQ
How much will fuel cost this winter? Check out the Department of Energy's 2009 Forecast www.eia.doe.gov "Having
fallen from record highs to below $50 per barrel, WTI prices are
projected to average around $100 per barrel in 2008. Under
current economic assumptions and assuming no major crude oil supply
disruptions, WTI prices are expected to average $51 per barrel in 2009
(Crude Oil Prices), down from the $63.50 projected in last month’s
Outlook.
Your Comments One last straw to break the camels back. I put a for sale sign up on my property yesterday. As soon as I can I'm leaving Alaska. For you who are staying, good luck and you can have my share of the Alaskan Dream... That is if you can afford it. Robert Gilcrease 7/22/08 I have looked at the current leadership that exists in this state. I factored in costs, quality of life and chances of things getting better here in the future. I made a decision. I am leaving. There are a lot of people leaving! Try to get household goods shipped outbound from Alaska! 7/16/08 60 years here. Retired. Goodbye, home. Steve 4/12/2008 We are actually seriously considering moving to a warmer climate, specifically because of the fuel prices. Who can afford to stay warm here any more? On top of oil prices, the electric bill has doubled in the last 3 years as well, which GVEA attributes to fuel prices as well. I agree, no one will be able to afford to live here if this continues. Annette 3/6/2008 I started heating my home about six weeks ago with coal and wood. It\'s been a little more work, but I can\'t believe the cost savings, 75% of my heating oil bill. I was cocerned about what was going to go up my stack it just has not been a issue. Wayne 4/15/2008 I about fell over when we got our last fuel bill. Over $900 for the month. Ouch! I am beginning to wonder how anyone will be able to live here if fuel prices keep rising. Charles 3/4/2008 I got a delivery from Sourdough Fuel on their autofill program 2/29 $3.25 per gal. Not on autofill cost today is 3.44 per gal. Savings there but with 1650 sq.ft.,5 star rated home and temperature controlled to 64 degrees we are still paying over $400. per month for heating fuel. What can we do? How are young families getting by? It's frightening. Kathee 2/29/2008 Alaska is where I belong and Alaska is where I'll stay. My electric bill was no more than $170 all winter and my budget fuel payment was $275. All of this for 4 people in a 1400 sq ft home. Yeah, I pay more to drive, stay warm, eat, play...but, that's life. Do I wish we could turn the clock back to when it was less than $1/gal for gas and $.25 for a loaf of bread? Sure. But we can't. Sal 4/15/2008 Submit Comment
Alaska has abundant crude supplies and refining capacity. So why are are the prices at Alaska's pumps continuing to climb as the prices are dropping in the rest of the nation? One reason is that one third of Alaskas gasoline is now refined from overseas imported crude (KTVA-11 story). That's right, Cook Inlet oil reserves are running out and the Tesoro refinery in Nikiski has to import 24,000 bbl./day from overseas to make up the difference. To make matters worse, the Flint Hills refinery in North Pole which pulls its crude oil directly from the trans-alaska pipeline has cut gasoline production in half because it can no longer meet EPA low-sulfur guidelines without importing low-sulfur blend stock from Nikiski. Before Flint Hills cut production Alaska was exporting gasoline at a rate of 2,000,000 barrels per year. Now we are in a situation where we have to import crude from Indonesia in order to meet our own demand. Our current situation leaves the Tesoro refinery with an 80% market share for gasoline and a 100% market share for highway diesel. With an unregulated monopoly market forces of supply and demand get out of balance and consumers end up paying for it. "When you have to bring in one third of the refining capacity at Tesoro from countries like Indonesia, Africa, Australia, that's an added expense." Bill Popp, President - Anchorage Economic Development Corporation. The ones not getting rich off high gas prices are the retailers. The retail margins have not increased as pump prices have climbed upwards. On average gas stations make between $.10-.12/g. and box stores often sell gas for less than cost through various reward programs. Fred Meyers is actually selling their gas for less than cost (click on the margin report below and see for yourself). The only ones making money from high pump prices today are Tesoro and Flint Hills, Alaska's monopolistic refineries. Fairbanks Heating Oil Prices
Prices subject to
change, #1 Heating Oil is typically 2 cents/g. more
--Submit your updated prices here-- 09-17-2007 Alaska Gasoline Margin Report Crude Oil Sale Invoice from State of Alaska DNR to Flint Hills
Top 2 Reasons that Alaska should have the lowest gas prices in the US 1. Alaska has the lowest gas tax in the United States. The state tax of 8 cents in 13 cents less than the US average of 21 cents per gallon. With the recent legislation we will soon have no state tax. Savings $0.13-.21 cents 2. Alaska refiners have the lowest transportation cost. Alaska's refineries have pipelines to deliver their crude. Flint Hills is directly connected to TAPS and buys their crude directly from the State of Alaska. They pay the West Coast spot price minus the downstream pipeline and marine transportation tariffs. This works out to a savings of around $10 million dollars per month off the market price that the west coast in paying. This alone should put our prices at 10 cents less than the west coast. (State of Alaska Oil Sale Invoice) Savings $0.10 Energy Shortage Looms in Southcentral - Alaska Journal of Commerce
Updates The Alaska railroad tariff on petroleum products between Anchorage and Fairbanks is $0.087/g. which equals out to 3.5% of the retail price of gasoline. October 2008 Prudhoe ANS spot price $84.77 - $1.550 - $5.11 + $1.10 - $.07 = $79.14 Flint Hills price
Excerpt from the oil sale contract
between Flint Hills and the State of Alaska We were finally able to get the State of Alaska invoice for the sale of crude to Flint Hills. It looks like we were wrong about how much Flint Hills actually buys their crude for. It turn out that the discount that they get is in the neighborhood of $9 million dollars per month. At this price for crude oil Flint Hills should have the cheapest wholesale prices in the U.S. Another fact that I find very interesting is that jet fuel, on average, is less than 5 cents more in Anchorage than Seattle. This compares to the 25-40 cent difference that we are seeing in wholesale unleaded and diesel. Regulation One possible solution is to start regulating petroleum refineries as public utilities. A very compelling argument can be made that Alaska's refineries should indeed be regulated by the RCA. Alaska has six petroleum refineries, which at first glace would indicate that there are many producers and plenty of competition. The fact is that of these six refineries only two produce gasoline and there is only one producer of low-sulfur highway diesel. Flint Hills being one of the two gasoline producers, controls over 55% of Alaska's production with Tesoro in Kenai controlling less than 20%. Two of the other refineries are operated by BP and ConocoPhillips for their own operations on the North Slope. Imagine how expensive it would be to run their operation if they had to pay as much as the rest of us for fuel. EPA Finalizes Low-Sulfur Diesel Fuel Transition Program for Alaska Starting June 1st, 2010 all areas of Alaska are going to be required to transition to 15 ppm low sulfur diesel for all highway, non-road, locomotive, and marine diesel fuel uses. Flint Hills has decided against making the investment in hydrodesulfurization technology leaving only one producer of low-sulfur diesel fuel in Alaska. This is despite the fact that they process over 55% of Alaska's refined products and get a nearly $9 million dollar a month discount off the ANS crude that they purchase from the State of Alaska. It also goes against the agreement to do $100 million dollars worth of upgrades to product low-sulfur fuel that Flint Hills made with the State when they purchased the refinery from Williams. Flint Hills solution was to instead make a deal with Tesoro Alaska's refinery to supply the low-sulfur diesel for the interior of Alaska Can you say market collusion or anti-trust? Alaska's refining industry is a bilateral oligopoly, a market with few sellers (oligopoly) and few buyers (oligopsony). Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may collude to raise prices and restrict production in the same way as a monopoly. Where there is a formal agreement for such collusion, this is known as a cartel. Firms often collude in an attempt to stabilize unstable markets, so as to reduce the risks inherent in these markets for investment and product development. There are legal restrictions on such collusion in most countries. There does not have to be a formal agreement for collusion to take place - for example, in some industries, there may be an acknowledged market leader which informally sets prices to which other producers respond, known as price leadership. If you are tired of paying an exorbant amount of money for fuel, tired of the same old story from Jeff Cook and ready to do something about it: please contact us. You can reach us through email or through the comment form. Justin Powell
Recent Feedback"The government will NEVER find that there is price gouging in Alaska. Just look where the campaign contributions come from to know why. No politician will ever agree to bite "the hand that feeds them." "The government will NEVER find that there is price gouging in Alaska...." That’s a cop-out, you can say that with Local, State or Fed’s. Local government is the place to start taking over again, to get corruption out, but I really do not see an attempt to do so. All I hear about is giving a corrupt Government more tax dollars I guess to thank them for being corrupt. "Isn't it just amazing that we have all of the refineries in our area and yet pay more in fuel costs than Anchorage? I was always curious why our prices are based on California's prices. Ever wonder after the hurricanes last year, how they ranted and raved that 25% of refineries were closed? Why didn't they go on and on about the 75% still up and running? Alaska seems to be full of corrupt politicians lining their fat pockets with more oil profits each and every day. Every time one of them opens their mouth I look for the obvious trail of B/S to soon follow. Investigate gouging? Isn't that the old fox guarding the hen house routine? "Information that shows actual figures and not just how comes is refreshing, I fully support your goals." "I do not believe more taxes is the answer to anything. I wonder why our government, local and State has not seen a problem and launched a price gouging investigation on the refinery and retailers. According to your article retailers are also price gouging. After an investigation if found guilty, the Oil Company and or Retailer would payback consumers out of profits. I don’t mind and understand the need for profit and so do retailer and the oil companies. A tax is not minded by a company, they can and will just push it off to consumers, but clime into there pockets with no way out they will see the light. Then thinking back to the question I purposed; I wonder why our government local and State has not seen a problem. Greed and corruption is everywhere isn’t it, need I say more. This is the precise reason for no more taxes." "I want lower fuel prices too, but having the state setting fuel prices is cutting off your nose to spite your face. The answer is implied in many of the points made on this page -- competition in a free market. Ask yourself this. Could you make money by trucking gasoline up from Anchorage and selling it in Fairbanks? A lot of money? If so, go for it! If not, then the prices (relative to Anchorage) aren't that high." The Alaska railroad tariff for petroleum products between Anchorage and Fairbanks is $0.0870/g., but this does not matter because the oil sale contract between the State and Flint Hills has a price parity agreement. The wholesale rack price for Flint Hills has to be within 1 cent in both markets. The difference in price between Fairbanks and Anchorage is mainly due to a lack of competition between local retailers. We have a situation where the box stores are price setters and the convenience stores are following their lead and at no time competing with a lower price. When was the last time you saw a Tesoro or Holiday station with a lower price than Fred Meyers? Independent gas stations are almost extinct and we are starting to pay the price of consolidation. The other contributing factor is that Anchorage has three different suppliers (Tesoro, Flint Hills, and Chevron) while Fairbanks has one. The price we pay has nothing to do with the costs to refine the gasoline produced here in Alaska. JP "Let's look at the price of diesel. It is cheaper to refine and now cost much more at the pump. This is a crime. " All diesel used for highway vehicles is now required to meet federal low-sulfur standards. It does cost more to refine low-sulfur diesel, but not as much as we a being charged. The biggest reason for the high diesel prices is that there is only one producer of low-sulfur fuels in Alaska. Flint Hills has violated their agreement with the State to upgrade the North Pole refinery and has no plans to produce low-sulfur diesel. This has left the Tesoro refinery with a statewide monopoly on diesel and forces Alaskan's to pay whatever price they want to charge. JP "I think it is high time that the refiners in Alaska are brought in line. The only way to practically do this is to treat them as a public convenience. Regulate them as a Utility and regulate their profits. The time is long past due to put an end to this rampant profiteering through the use of state subsidized oil. Nowhere else in the world is a refiner allowed to pull off the high value feed stocks and return the low value "waste" back into the pipeline without being forced to develop those low value products. The time for the State of Alaska to bring this to an end is here. Lets allow a reasonable profit while giving back to the residents of Alaska some additional benefit from their oil." 1/5/07"We have enough gov't regulation, don't need more. Just boycott the high price stations." 1/14/07 Corporate contacts Fred Meyer Fuel Cliff Haldwell 1.800.858.9202 ext.3734 Holiday Stores Bob Nye 1.800.745.7411 ext. 8737 Sourdough/Petrostar Mark John 907.339.6627 Flint Hills Jeff Cook 907.488.5104 |
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Our Mission"To lower interior fuel prices through consumer awareness" Send mail
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Alaska gas prices refinery wholesale diesel low-sulfur gasoline
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