Gas prices in Alaska deserve scrutiny

A recent report released by the Alaska Department of Law concluded that while Alaskans were paying higher prices for gas than people in other states, there was no illegal collusion involved. The state cannot regulate wholesale or retail prices, but it does not allow competitors to enter into price-fixing agreements, either.

Even though Alaska does not allow for regulation, this exercise may be an argument in favor of at least more scrutiny of businesses in the state. While the investigation didn't uncover any illegal activity, gas prices did drop after the investigation began. It may have been a coincidence, but it likely was not. There is always less snacking when mom is watching the cookie jar.

Prices on the West Coast are usually higher than in the rest of the country, and prices in Alaska are usually higher than those on the West Coast -- even though Alaska is home to the largest oil field in North America.

Part of the problem is that there are only two refineries here, and only four petroleum wholesalers. A lack of competition means a lack of choices, and that usually leads to higher prices. When the Bell Telephone monopoly was broken up years ago, many people predicted worse service and inconsistency. In fact, the proliferation of communications providers led to better service, technology advances and lower prices for consumers.

It turned out that Bell had been sitting on technologies that eventually led to things like cellular phones -- because there was no pressure from competitors to develop that technology.

It is not likely that Alaska will see much in the way of more competition in the petroleum market. Our demand is fairly constant and fairly limited, so there's not much room for growth.

For that reason, it may benefit consumers if somebody was keeping an eye on the henhouse. While there is nothing illegal about the way the higher prices occurred here, Alaskans shouldn't have to pay higher prices for gas simply because there's no place else to go. We are accustomed to paying more for goods in Alaska. We understand that it costs more to ship products to Alaska, and it's one of the prices we pay for living in such a remarkable place.

However, when the fuel is refined right here, and when our own state is such a large producer of oil, it's hard to justify high prices at the pump. We may not need regulation, but a little monitoring couldn't hurt.