CHARLESTON — West Virginia Attorney General Patrick Morrisey responded to a request from West Virginia Senate Democrats to look into high gas prices in the Mountain State.
Attorney General Morrisey sent a letter outlining his response to the Dec. 15 request on Wednesday.
The Attorney General raised concerns that national-level policies were partially responsible for higher gas prices. The Biden administration, by effectively killing the Keystone XL pipeline extension and by placing a moratorium on drilling for oil, kept U.S. production of crude oil from expanding and strained the supply for refined products like gasoline.
Moreover, the Biden administration’s release of 50 million barrels of oil from the U.S. strategic reserves does little to ease the burden on West Virginia consumers when the country consumes about 20 million barrels of oil a day.
The Biden administration has proposed new methane regulations on oil and gas producers that would inevitably cause prices to increase at the pump. These regulations should not be implemented if the president is committed to reducing gasoline prices.
“We are currently experiencing a surge in demand for gasoline products while the supplies have been less than anticipated. Thus, prices go up,” Attorney General Morrisey wrote. “As the economy continues its recovery, and supply chains return to normal patterns, short term swings in the available supply of gasoline for the demand will likely reach an equilibrium. If unlawful, anti-competitive activity is detected in the retail gasoline industry, my office will take appropriate action.”
The letter from the senators to the Attorney General suggested price gouging may be occurring when it comes to gasoline prices. However, since the Governor exempted most consumer goods from his declaration of a State of Emergency, price gouging laws do not apply and businesses remain generally free to price their products without government intervention.
In the long term, prices for gasoline generally follow the prices for crude oil. There are periods of time when the prices diverge, but they are usually short lived.
Many factors are involved when it comes to gas prices, including the price of oil in the world market, wholesale or rack prices, taxes, reserve levels, distribution bottlenecks, weather events and domestic and international news events.
The Attorney General believes some of those factors may be addressed by the West Virginia Legislature, such as the taxes that are levied on motor fuel in the state. Taxes on gasoline in West Virginia are significantly higher than in neighboring states such as Virginia and Kentucky. If the Legislature lowered the tax burden on gasoline in West Virginia, it would make retailers more competitive with their counterparts in bordering states.
Read a copy of the Attorney General’s response letter at https://bit.ly/3rb6xKY.
