Franchot to look closely at gas prices

‘Zone pricing’ and ‘hot gas’ are concerns for comptroller

‘‘Every time we can shine light on the various elements of the price and why they change, we should do so,” said Mahlon G. Anderson, AAA Mid-Atlantic’s director of public and government affairs. ‘‘Right now shining light on these things will give the public more confidence that they aren’t being abused.”

Franchot (D) also said he wants more information about the effect of ‘‘hot gas” at the pump. Liquid gasoline expands as the temperature rises, so customers often have to pay more to fill up the tank when the mercury climbs.

‘‘They’re getting hot air,” Franchot said matter-of-factly.

He also wants further investigation of ‘‘zone pricing,” a practice that allows wholesale suppliers to sell gasoline at different prices to retailers based on geography and competition.

‘‘We go to the gas station dealerships [and ask] ‘When you are charging 40 cents more for a gallon of gas than the same gas station six miles away, who’s getting the money?’ and they say ‘We’re not getting any of it,’” Franchot said.

Legislation this year that would have created a task force to study zone pricing in Maryland died in the Senate. But Franchot said his office might take more formal action to make the practice more transparent.

‘‘We can get to the bottom of the issue of high gas prices,” he said. ‘‘Right now, the federal government and state government are saying to the public, ‘We can’t figure it out. It’s too complicated. It’s a little of this and a little of that.’ And the result is $4 a gallon. We suspect that Houston [home to several of the big oil companies] is gouging the public as far as gas prices and as soon as we get to the bottom of it, we’re going to release that information.”

Anderson applauded Franchot’s effort to look into zone pricing.

‘‘Zone pricing is kind of like the little black box of the industry. It has a lot to do with how prices are the way they are, but no one gets to look inside,” Anderson said.

‘‘What gas companies do is very secretive and they say releasing the info would be like divulging trade secrets,” he said. ‘‘But especially now the public needs some assurance to make sure the prices aren’t due to tinkering by oil companies.”

A 2007 Supreme Court decision ‘‘cut the legs out” of efforts to regulate gas prices at the state level, said Joseph Shapiro, Franchot’s spokesman.

That makes it unclear what can be done to help consumers. ‘‘We’re just exploring if there are any options,” Shapiro said. ‘‘There might not be.”