Local gas prices will not result in investigation

Colorado Attorney General's Office cannot investigate high price of fuel; state has no price gouging law

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By RYAN SHERIDAN
Daily Press writer
The Colorado Attorney General's Office will not be investigating the reasons behind higher gasoline prices in Craig as compared to the rest of the state.
Colorado does not have a price gouging law, and high and/or uniform prices do not warrant an investigation. The only way the Attorney General's Office could investigate the prices would be if a witness stepped forward with information about wholesalers or retailers of gasoline coordinating on or communicating about prices.
"There needs to be some evidence of coordinated activity or communication between competitors that's the key trigger," said Maria Berkenkotter, first assistant to the Attorney General. "Generally speaking, investigations aren't commenced because of high prices or uniform prices or both. The best way to begin is with insider testimony, or someone overhearing a conversation.
"To issue subpoenas for an investigation, you need to meet a certain threshold of evidence. A judge would throw the case out in seconds if I just went in with high prices," she said.
The Attorney General's Office began an investigation into a similar situation in Grand Junction in the summer 1999. The lack of concrete evidence of price fixing, plus the factors of transportation costs, wholesaler concentration, and lack of competition ended the investigation.
In conclusion, the report states, "Competition in the gasoline industry is critical to ensuring that Colorado residents have access to the lowest prices for this important commodity."
The report also cites the gradual entry of grocery stores and what it termed "wholesale buyer clubs" into the Grand Junction market as important competitive entities that could drive prices down.
The report stated that these types of new market entrants will likely have a significant impact upon competition among retail gasoline stations to the extent that they continue to expand in this area.
The state of Colorado has no gasoline price-gouging law.
According to Berkenkotter, such a law, depending on its structure, could allow the Attorney General's Office to look into situations like the one in Craig.
"About 30 states have price gouging statutes; most of those states are in the east and southeast," she said. "In about half of those states, a declaration of emergency is needed to trip the laws into effect. In others, it's when there's a spate of prices shooting up.
"How we would use a law like that here would depend on how the statute was drafted where the line is on where high prices become gouging, for example," she said. "I don't know where that line would be drawn.
"I totally understand why people are upset about gas prices, but there's nothing our office can do if there are any antitrust violations without someone coming forward. It seems like a long shot, but you'd be surprised how many people do come to us.
"If anyone has information about price fixing, they should talk to us."
Colorado State Senator Jack Taylor (R-Steamboat Springs) is also concerned with the inconsistencies of gas prices in Northwest Colorado.
Examining the legal aspects of the situation is on his agenda for the coming legislative session.
"I am aware of the problem, both from my traveling and phone calls I've received. Hopefully, this is something that I will have time to look at during this session," Taylor said. "The first thing I will do when I arrive is consult with legal services, and have them research the statutes. I will never be convinced that it costs that much money to bring gas over the mountains.
Residents of recreation communities will pay a premium for gas, and Craig is close to a resort community, but that doesn't completely explain what happens here in terms of gas prices, Taylor said.
"The inconsistency is what I see in the past, Steamboat prices were higher, and now Craig is priced higher. Where is the control? There have also been cases where a particular station lowers their price, and they'll be financially wiped out by the bigger companies. That makes me wonder about the whole thing."

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