Schweitzer: Stop price gouging at gas pump

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HELENA -- Gov. Brian Schweitzer Thursday called on Montana oil refineries to stop "gouging" gasoline consumers in the state, saying Hurricane Katrina should have no effect on prices for fuel refined and sold here.

"Even though their cost of production hasn't gone up one penny, they're raising the price 30, 40, even 50 cents," he said. "I think that's an outrage.

"That's not the way we treat neighbors. I'm asking them to hold the line. There is no reason to get a momentary spike to increase momentary profits."

Hurricane Katrina caused major damage in oil-production facilities in the Gulf of Mexico and the South early this week. Since then, gasoline prices have increased as much as 50 cents a gallon in Montana, hitting $2.85 a gallon in some cities.

Yet, according to Schweitzer, the refineries in Montana get their crude oil from Alberta, Wyoming and Montana, and the cost of that oil hasn't risen this week.

Montana refineries in Billings, Laurel and Great Falls shouldn't be affected by developments in the Gulf, and therefore have no reason to raise prices so dramatically, he said.

"I'm calling on them to be good neighbors and roll back prices to the same prices that (they) had last week," he said.

Representatives of the refineries did not return telephone messages seeking comment Thursday.

Exxon-Mobil and Conoco-Phillips have refineries in Billings; CHS operates a refinery in Laurel; Montana Refining Co. operates in Great Falls.

The Billings-Laurel refineries produce the vast majority of gasoline consumed in Montana.

They generally control the price at local gas stations, which pay "rack" prices charged by the refineries at certain loading stations along pipelines that run through the state. When those rack prices go up, retail prices for gasoline and diesel follow suit.

Schweitzer said he spoke to local managers at some of the refineries, and they gave no indication that they would be lowering prices.

Still, the governor said he hoped they would reconsider, since their costs of production haven't increased at all in recent days.

"I don't have the authority to tell them how to price," he said. "But it's imperative that they're sensitive about taking care of their neighbors in tough times."

Schweitzer said the state has been kind to the refineries in the past, cutting them some slack when they violated sulfur-dioxide emission standards.

The refineries also have enjoyed huge property tax breaks on equipment, passed by the Legislature since 1997.

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