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State probe of gas prices should uncover the truth

September 13, 2005

When bad things happen, people turn to their elected officials and ask why. For anyone who drives significant distances, the recent spike in gasoline prices qualifies as a bad thing. But finding out why that happened will probably be a lot easier than reversing the increase.

The average price of a gallon of gasoline in Maryland went from $2.30 per gallon a month ago to more than $3 last week. That compares with a per-gallon price of less than $2 a year ago.

Last week, Maryland Gov. Robert Ehrlich met with a number of unnamed executives of the energy companies in an effort to find out why prices in the state are more than 20 cents above the national average, despite what he said was an adequate supply.

After the meeting, Ehrlich said he was not satisfied with the answers he heard and was scheduled to meet with energy executives again yesterday.

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Drew Cobbs, executive director of the Maryland Petroleum Council, told The (Baltimore) Sun that supply has been interrupted because about 70 percent of Maryland's gasoline comes from two pipelines that were shut down as a result of Hurricane Katrina.

Cobbs also said that Maryland has a restricted supply because the federal Clean Air Act requires that the Baltimore-Washington area to use a special type of oxygenated gasoline to reduce air pollution.

But John Millet, a spokesman for the U.S. Environmental Protection Agency, told The Sun that there is plenty of the oxygenated gasoline available. EPA can grant a waiver based on supply, he said, but not on price.

The explanations we've heard for the price spike ? the shutdown of Gulf Coast refineries and an increase in worldwide demand ? sound plausible. But we support the effort by Ehrlich and Maryland Attorney General Joseph Curran to make sure Maryland consumers aren't being gouged.

It may be, as some industry spokespersons have said, that retailers have to price the product high enough so that they can replace their supply when necessary.

But as Curran has said, it would be naive to accept without question that the forces of supply and demand are totally responsible for the increases.

An investigation by state officials may not cut prices, but knowing the truth will be a whole lot better than just having a hunch about why they jumped so quickly.

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