Burlington gas prices exceed FTC projections
Gasoline prices in Burlington in June were as much as a dime to 43 cents greater than a Federal Trade Commission computer model projected they should be, according to commission data turned over to U.S. Sen. Bernie Sanders (I-VT).
While Vermont motorists already pay among the country's highest prices to fill their tanks, the June price spike in Burlington exceeded what a computer model used by government economists said was the absolute highest price stations should be charging.
While prices have dipped by several cents after Sanders on Monday made public his call for a federal investigation into unusually high gas prices, the trade commission data detail a month-long trend of unusually high prices in Burlington.
The detailed data was turned over to Sanders after he called for a probe by the trade commission and the Oil and Gas Price Fraud Working at the U.S. Department of Justice.
As of the first weekend in June, Burlington prices averaged $3.84 a gallon, about two cents more than the computer model's predicted high and 34 cents above the predicted low, according to the FTC data. By June 30, the average price in Burlington was $3.68 a gallon, a dime more than the predicted high of $3.58 and 44 cents above the predicted low.
Burlington is one of 360 metropolitan areas around the nation where the FTC's Bureau of Economics tracks gas prices and compares them to a projection of what high and low prices should be. The monitoring project tracks wholesale and retail prices of gasoline “to identify possible anticompetitive activities and determine whether a law enforcement investigation would be warranted,” according to the commission. The formula used by the monitoring project considers in supply and demand, geography and other factors.
In Vermont today, the average price of a gallon of unleaded regular is $3.53, the tenth highest in the lower 48 states, according to AAA. In the Burlington area, defined as Chittenden, Franklin and Grand Isle Counties, this morning, AAA said the average price was $3.60. Prices were higher in downtown Burlington.
Sanders pointed to evidence that in recent days Burlington gas prices were 15 cents to 29 cents greater than prices charged by gas stations only about 35 miles away in other Vermont towns.
“Prices here in the Burlington area and other parts of Vermont are much higher than they should be,” Sanders said. “So far, no one has given me a particularly good explanation.” One factor may be that just four companies own 58 percent of the stations in the Burlington market.
“People who own service stations have a right to make a profit,” Sanders said. “They don't have a right to rip people off,” he added.
Source: Sanders' office. BURLINGTON, Vt., July 6, 2012