Gov. Jim Doyle accused oil companies of price- gouging in the wake of Hurricane Katrina and demanded an $88 million refund for Wisconsin consumers at a press conference Tuesday.
\The last few weeks have been difficult for Wisconsin's working families,"" Doyle said. ""The record gas prices we've seen are just one more strain on family budgets.""
Doyle presented a letter that he and seven other state governors sent to President Bush and Congress, asking for an immediate investigation in to the ""excessive"" profits being made by oil companies, as well as legislation that would return ""ill-gotten profits"" to the consumers.
In the letter, a study by Don Nichols, UW-Madison professor of economics and public affairs, is cited as evidence that gas prices have risen disproportionately in comparison to the price increases per barrel of crude oil. Nichols' study, published Friday, said while Hurricane Katrina has caused some temporary disruptions of oil supply, it has not led to a huge price increase in crude oil.
""The recent surge in gasoline prices is not due to a surge in the price of crude oil,"" Nichols said in his study, and added that there is no clear explanation why the gasoline prices nearly tripled after Katrina.
Erin Roth, executive director of the Wisconsin Petroleum Council, said Doyle's claims of price gouging by the oil companies were inaccurate.
""Crude oil prices did rise as sharply as wholesale gasoline prices [after Hurricane Katrina],"" Roth said.
Before the disaster oil was at $65 per barrel and after, the price jumped to $72 per barrel, an ""all time high,"" he added.
Roth also pointed out the eight governors who signed the letter are all Democrats, and said Congress is already examining the issue.
Working alongside Doyle, state Sen. David Hansen, D-Green Bay, said the oil companies seem to be running a monopoly situation.
""[This] is not a fair market system, or a free market system,"" he said.
UW-Madison consumer law professor Gerald Thain said the request for a refund is ""a little unusual,"" but it is not unprecedented. He said a call for restitution is appropriate given the large number of consumers affected by high gas prices.
UW-Madison is dealing with the increased gasoline prices in various ways. Lance Lunsway, director of transportation, said the university's vehicles are already under signed contracts with Madison Metro through this year, but negotiations for next year's contract could be made difficult because of the high prices.
To reduce some of the impact, Lunsway said the university is looking into alternative energy resources and already has a hybrid car on campus.
""[We're] trying to be as fuel efficient as possible,"" Lunsway said.
