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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Bill Gives AG’s Office Tools To Examine Gas Market Manipulation

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VPR/Kirk Carapezza
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After just raising the gas tax, lawmakers are also looking at whether consumers are getting gouged at the pump.

The focus now is on a bill to give the attorney general’s office the ability to track price data to see if companies are manipulating the market.

Rep. Chris Pearson, P-Burlington, sponsored the bill. He wants to know if gas distributors in Chittenden County and Northwestern Vermont have used their market clout to keep prices high.

“When you look at the price at the pump, we’re often paying a dime, 15, 25 cents more per gallon than just down the road here in Montpelier or Middlebury,” he said. “And so the question is why? And there are a lot of theories. What this bill tries to do is give us some data so we can really test those theories and see if there any anti-competitive practices going on, and kind of dig in a little deeper.”

Pearson’s bill follows an investigation by Senator Bernie Sanders into high gas prices paid in Burlington. Dan McLean is senior press aide for Sanders. He told the House Transportation Committee that once Sanders launched his well-publicized probe, prices in the Burlington area fell.

“Our observation is when there is a spotlight by the Legislature and by the media gas prices in this region become more competitive,” he said.

Before the spotlight, McLean said prices were higher in northwestern Vermont than in other parts of the state.

“We studied three and half years of gas prices, provided by the Oil Price Information Service, and it was clear that Vermonters living in those three counties paid consistently more than the US and statewide average,” he said. 

Senator Sanders blamed the higher prices on a handful of distributors who may be using their market power to charge more. But a lobbyist representing the fuel distributors says the market in Northwest Vermont is strongly competitive. Joe Choquette of the Vermont Petroleum Association, said factors outside Vermont influence gas prices.

“There have been studies of the industry and how pricing occurs; there have been studies after major disasters by Federal Trade Commission that concluded that the biggest factor in the price of gasoline is the price of crude oil,” he said.

The committee also heard from Michael Marcotte, a Newport Republican who owns a gas station and convenience store. Marcotte has been in business 30 years, and said he never felt that fuel distributors were trying to influence the wholesale market.

Marcotte is also concerned about a provision in the bill that would require gas station owners to notify the attorney general if they want to buy another business or sell their own.

“If someone came to me and wanted to buy my business they’d have to go to the Attorney General’s 60 days prior to get investigated,” he said. “What other business has to do that? I don’t know why we’re focused on convenience stores and gas stations.”

Chris Pearson, the Burlington Progressive who sponsored the bill, said the requirement should not be onerous for businesses like Marcotte’s.

“The concern is there is a concentration of ownership at the distribution level in particular. And if the number one distributor is going to buy the number two distributor, the attorney general has a right today to intercede in that. But they are not going to know until they read it in the newspaper,” he said. “This just gives them advance notice. It’s important consumer protection.”

With time running out in the legislative session, the bill may not move this year. But Pearson believes that the publicity around the issue has already lowered prices in Northwest Vermont.