What's kept fuel prices in rural Alaska so high, even as crude oil prices dropped?
The Institute of Social and Economic Research at the University of Alaska Anchorage has been trying to find out.
Click here to read their report. And here for the four-page summary.
At first glance, the report appears to say they didn’t find evidence of price-gouging among fuel distributors in Western Alaska.
Instead, the report lists several factors that have boosted fuel bills in the region:
-- “Price recovery among fuel distributors, after earlier competition for market share pushed prices below sustainable costs.”
-- Repairing and replacing old tugs and barges.
-- Building new tank farms.
ISER also looked at how local leaders or organizations in villages are setting prices:
After accounting for those factors, most of the remaining variation in retail fuel prices in Western Alaska seems to result from differences in price-setting practices at the community level. Those include differences in collections for operating and maintaining local tank farms; levels of local compliance with safety and environmental requirements for storing fuel; debt payment on bulk fuel loans; and price mark-ups to collect revenues for other community purposes.
More later.
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