Alaska's gas prices lower than in Midwest

Posted: Thursday, June 22, 2000

FAIRBANKS (AP) -- Something unusual has happened to the price of gasoline in Alaska.

While the price for regular unleaded has soared an average of 13.3 cents a gallon around the nation, Alaska's has dropped and, for the first time since analysts can recall, prices in the Last Frontier are lower than Detroit, St. Louis, even Tulsa, Okla.

''I couldn't believe Alaska headed down,'' said Charity Watt Levis, a spokeswoman at AAA who tracks the data.

The average price for regular unleaded in the state dropped a penny a gallon the past month, bringing Alaska's average to $1.61. Meanwhile, supply problems in the Midwest pushed the national average to just over $1.64 a gallon -- the highest in history, according to the AAA.

Last July 4, prices averaged $1.28 in Alaska and $1.15 across the nation.

So why the unusual inversion? Excess production capacity at the state's two major refineries.

''All the refiners came out of the winter with a lot of gasoline stock,'' said Jeff Cook, spokesman for Williams Alaska Petroleum Inc. which operates a refinery in North Pole. ''We refine more gasoline than we can consume in this state.''

Alaskans buy about 672,000 gallons of gas a day, Cook said, whereas production has a capacity of more than 750,000 gallons. ''Right now, there's a lot of competition.''

That's not the problem Outside, where a leak in a key pipeline and routine maintenance on another have put a pinch on markets in St. Louis, Chicago and Milwaukee, Levis said.

Compounding the problem are new federal regulations, effective June 1, requiring gas stations across several states to sell cleaner-burning reformulated gasoline.

''We're not having a shortage, but our reserves are not up to the level we have had in the past,'' Levis said, adding that the problem will likely get worse before it gets better. ''We're going into summer, demand is increasing and the supply is not that strong.''

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