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    Minnesota A.G. Accuses Oil Cos. of Greed

    Blames refiners and shrinking pool of competition on Sept. 11 price spikes.

    ST. PAUL, Minn. -- While other states have resolved alleged price gouging on the heels of Sept. 11, Minnesota Attorney General Mike Hatch accused state refiners and service stations of greed after they jacked gasoline prices immediately following the terrorist attacks

    Nonetheless, Hatch said his office found no evidence of crime. "I don't like it," he said, following the issuance of his Minnesota's Gasoline Market report that followed an eight-month investigation. "I'm not saying it was illegal, but it was wrong."

    The report notes that Minnesota's gasoline prices are higher than the national average because gas supplies are concentrated in the hands of few suppliers. Underscoring a theme that is capturing national attention, the report says that consolidation is undermining competition. In short, the same entities control the entire distribution chain ? from exploration and production to refining and retailing.

    The report did make recommendations to allay repeats of the price spikes seen more than 10 months ago. It suggested creating a state gasoline reserve, akin to the national Strategic Petroleum Reserve. He also said lawmakers should look at making it illegal for suppliers to deliberately withhold gasoline supply in an attempt to drive up prices.

    "We are very vulnerable in this state," he said. "Inventory is an issue that we are going to have to address."

    In the hours after the terrorist attacks, some gas stations in the Twin Cities and around the state jacked gasoline prices ? one retailer even posted a price of $5 a gallon but says he never sold any at that
    price. More typical was regular unleaded retailing for $1.50 a gallon in the Twin Cities.

    While refiner and oil companies responded that there was ample fuel and no cause to raise prices, the attorney general's office discovered from internal corporate e-mails that some of those refiners and oil companies had themselves set the price increases in motion, The St. Paul (Minn.) Pioneer Press reported.

    For instance, Marathon Ashland Petroleum, which operates one of the four refineries serving Minnesota, told retailers shortly after the attacks that it was raising the price of gas 7 cents per gallon for its company-owned stations, and 12 cents per gallon for independent stations that bought gas from Marathon Ashland. The oil company declined comment, the newspaper said.

    ABOVE: Minnesota Attorney General Mike Hatch.

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