Letter to the Editor
Price of Fuel
Published Friday, May 23, 2008
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To the editor:
The price of fuel oil in much of Alaska is determined by the state of Alaska selling your royalty oil property to Fairbanks refineries. The governor can, with a wave of a pen, reduce the royalty sale price to $25 per barrel versus today’s price of more than $120 per barrel — thus reducing the price per gallon to one-fifth the current price.
The governor can, as a royalty oil purchase condition, require a retail price reduction, thus cutting the cost of fuel to everyone (including Anchorage) buying royalty oil products refined in Fairbanks. Any money received via the “card program” is taxable income.
However, reducing pump price with a “wave of the pen” is not taxable income, carries very little administrative expense and benefits customers equally.
Community Discussion
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Too simple, it will never fly.
I would like to see something work.
First off, the North Pole refineries produce mainly diesel and jet fuel. Your gas prices would not drop. Second, that's not all of the diesel that the state needs, so prices would not drop nearly that much. Third, there is no guarantee that the refinery would pass on the savings. I understand that there are anti-trust issues involved, so the North Pole and Southcentral refineries have to sell at roughly the same price anyway.
Good Letter, Jim! Nice to know someone else is thinking rather than complaining! This is the third time Ive posted this to a fuel price story...sooner or later mabey we can all jump on this bandwagon:
Lets cut the middleman out of this; ie: the world commodities market. How about a 3 part law that reads something like this:
1. A % formula for the prices of different products of crude oil based on todays standards of profit. (If Flint Hills nets, say, $.15/gallon on gasoline produced and sold in the state, then the formula should reflect that.)
2. All crude oil processed and sold domestically (retailed within the state) will be sold to producers for $.05/barrel.
3. Crude oil and related products sold or otherwise removed from the state will remain priced according to the world commodities market.
Seems easy enough to me; after all, what everyone agrees on is that the oil belongs to us; the people of Alaska. Anyone else ready to pay 25c/gallon for gasoline, or 30c/gallon for heating fuel???
I have no idea what the actual figures are for prices/profits, etc, but I think my idea has merit and deserves serious consideration regardless of the actual numbers.
The solution is even simpler than that. All retail outlets already have the mechanisms in place to collect a sales tax. The state could provide the rebate at the point-of-sale as a sales tax credit. The retail level is by far the most competitive market and there would be little chance of price manipulation. It's so simple and could be put in place within a matter of days not years.
This is the only reasonable and fair solution to the high cost of heating oil in Fairbanks and rural Alaska. The $1.2 billion dollar program which proposes a $100 Energy Debit Card will in no way make much of a difference this coming winter when heating oil soars to $8-$10 a gallon; it'll buy us 10 gal. of heating oil.
There are going to be a lot of empty houses around here after heating oil hits $8-$10 a gallon. Just think how high the PFD will be with all the oil money the state is getting and 50,000 less people to file for it. If you have a big house with a big fuel tank next to it and a job that depends on people staying in Fairbanks and spending money you might start looking at other options.
Yep, been saying this all along. Sent notes on this to ramras, kawasaki and wilkens.
This will drastically cut the inflation in alaska, reduce government overheads on all levels including school districts AND draw more population and new businesses to alaska due to the lower operating costs. It's a win-win solution. sell the states royalty oil to the refinery at 45-50 per barrel and still have plenty of revenue to serve the states needs and keep those PFD's growing.
Jim: GREAT IDEA! Now if Governor Palin and the Legislature have the interest of Alaskans as their first priority, the up-coming special session to address the energy crisis issue will be the proof-in-the-pudding. And time to throw the neighsayers out of office come election time.
Friday, 23 May
Nenana
Regular unleaded $4.80/gallon
1967, 30miles north of Healy
hit a solid flow of Coalbed Methane
while pounding in a 2.5" waterwell
using an old pickuptruck with a bare-rim
as a power windlass
we hit gas at 200'
the authorities came by 2days later and told us what we did was illegal and to put the fire out, and keep our mouths shut
anybody can drill for gas in Alaska nowdays if you get the proper permits and claims filed
northpole 4.19 bummer people need buy in fairbanks force NP to lower their prices. united we can do wonders. alone and the wolves win. even a wolfpack knows the power in numbers
distant thunder, where exactly were you when you hit the gas? Ive heard there was gas discovered near Rochesters Lodge some time ago.
I would gladly jump the hoops for permitting...
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