Nevada AG seeks answer for rising gasoline prices

Jace Radke

Friday, March 14, 2003 | 11:14 a.m.

Attorney General Brian Sandoval said today that he is asking gasoline industry authorities to justify the rising gasoline prices in Nevada and warned that any deceptive trade practices or market manipulation will be prosecuted.

"The challenge for regulatory and enforcement agencies is to distinguish higher prices influenced by valid market conditions from those induced otherwise," Sandoval said. "I'd like the public to be certain -- and the industry to be aware -- that we're on watch."

Sandoval has sent letters to gas associations and other industry authorities looking for information to justify the recent price spikes.

Peter Kruger of the Nevada Petroleum Market and Convenience Store Association was among those sent a letter and he said he plans to send copies to the 87 independent retail companies he represents.

"We will not, and have never practiced, price gouging," said Kruger, whose association represents about 450 gas stations in Nevada. "Over the last 15 years there have been five or six state and federal studies, and they have never found evidence of price gouging."

Gasoline prices in Nevada soared 17 percent in the past month, boosting the statewide average to $1.97 a gallon earlier this week. Nevada has the third highest prices in the nation, behind California and Hawaii, according to a survey by the Automobile Association of America.

Nationally gas prices have jumped 9 cents in the past month to an average of $1.70 per gallon.

Two out of three Americans said the recent rise in gasoline prices was not justified by current market conditions, according to a Gallup poll released last month.

"The consumer strongly blames the oil companies, not market conditions," Frank Newport, editor in chief of the Gallup poll, said.

Despite the poll there are possible market explanations for the increases such as a move to a war footing in the Middle East, a strike in Venezuela as well as costs of transporting gas to Nevada from California, Kruger said.

"I'm not saying that there isn't an individual retailer or wholesaler out there using the opportunity for free enterprise," Kruger said. "But this is such a competitive business at the retail and wholesale level that there is really a built-in safeguard.

"If you don't like the price of the gas at one station you can go to the one across the street. People bring up collusion, but retailers and wholesalers know that's illegal."

The Federal Trade Commission monitors prices nationwide in over 360 cities, and when anomalies are discovered, further investigation is initiated. The Attorney General's Office has contacted the FTC specifically to offer investigative assistance with regard to the price hikes.

"Conventional thinking is that interstate commerce and commodities aren't the jurisdiction of states' attorneys general," Sandoval said. "But we can't just rely on one federal agency to look out for our best interests when the market is big, complicated and quick to change."