

http://www.azcentral.com
Arizona has highest gas prices in West
Max Jarman
The Arizona Republic
Sept. 7, 2005 12:00 AM
Arizona is running out ahead of other Western states but not in a way that is going to cause people to start bragging.
The price of a gallon of gas in the Valley has surpassed the cost of gas in Southern California, which typically is considerably higher.
Arizona's average of $3.12 was the highest in the West on Tuesday. That compares with $3.05 in California, $2.99 in Nevada and $2.92 in Washington. advertisement
Filling up in San Diego or Los Angeles is now a bargain compared with gassing your tank in metro Phoenix.
Gas-price monitor AAA reported the average price of non-lead regular in Phoenix/Mesa at $3.14 per gallon Tuesday, 9 cents more than in San Diego and 14 cents higher than in Los Angeles.
The Arizona price is up $1.18 per gallon, or 61 percent, from a year ago.
Although experts are unable to say exactly why Arizona's prices are so high, the most likely culprits are high demand, shrinking reserves and the effects of Hurricane Katrina. In addition, Arizona has been affected by a refinery outage in New Mexico.
State Attorney General Terry Goddard believes the prices are unjustified and said they underscore the need for an anti-gouging law.
"Without an anti-gouging law, Arizona has very limited legal ability to protect consumers from unreasonable increases," he said.
The Legislature has twice turned down such legislation
The high prices have caught the attention of Sen. Thayer Verschoor, R-Gilbert. Verschoor, chairman of the Senate Transportation Committee, has asked state agencies to meet today to determine whether more can be done to lower prices.
David Cowley, a spokesman for AAA Arizona, believes the high Arizona prices could be fallout from an outage at Holly Corp.'s Navajo Refinery in Artesia, N.M., just before Hurricane Katrina struck the Gulf Coast on Aug 29. The refinery is one of four that feed gasoline into the El Paso-to-Phoenix pipeline that serves the Valley.
The refinery outage and increased demand as the holiday weekend approached reduced the Valley's fuel reserves to below an optimal seven days' worth.
"We entered the situation of the 29th with (gas) supplies in the Valley probably half of what they should be," Cowley said. "We're still trying to catch up.
The Arizona Department of Weights and Measures reported Tuesday that there was a three-day supply of gasoline in the Valley's storage tanks, given normal consumption levels.
"We certainly would like to see more," department spokesman Steven Meissner said.
He would not say how many days' worth would be optimal and attributed the drop to unusually high demand.
Meissner noted that before the holiday weekend, some stations were reporting a 40 percent surge in demand.
"A 40 percent increase in demand is going to have an effect on supply and prices," he said.
But increased demand was nowhere near as severe as the panic buying that followed the shutdown of one of two gas-supply lines in 2003. That created shortages, long lines at the pump and prices that had never been seen before.
"We did good," Cowley said of the relatively calm reaction to the recent price increases. "Arizonans exercised some restraint."
Besides causing enormous property damage and loss of life, the storm knocked out 95 percent of the oil and 88 percent of the natural-gas production in the energy-rich region. It also closed nine oil refineries and cut the nation's gasoline production by 10 percent. That has created shortages, particularly in the East and Midwest, and rising prices nationwide.
The national average reported by AAA on Tuesday was $3.04, up $1.19 per gallon, or 64 percent, from a year ago. But some of the refineries are getting back into production, which could reduce the shortfall to 5 percent.
Cowley noted that the refineries and pipelines that supply the Valley with gasoline are now operating at capacity. And, a recent temporary waiver of clean-air rules will allow traditionally lower-cost non-formulated gas to be brought in.
While some states are considering temporarily suspending sales taxes on gasoline to drive prices down, Pati Urias, a spokeswoman for Gov. Janet Napolitano, said there would be no reduction in the state's 18-cent-per-gallon gas tax.
"The fiscal impact on our road projects would be too great," she said.