A four-month study of fuel prices and what drives them in Nebraska turned up no evidence of price gouging by retailers, a conclusion that Attorney General Jon Bruning said he expected.

“I didn’t believe going into this we were going to find any price gouging,” Bruning said during a news conference in his Capitol office. He formed the panel of three university professors in September following historically high spikes in gas prices in the wake of hurricanes Katrina and Rita.

The study was in response to public concerns about gouging, not any evidence his office had that it was actually occurring.

Though Nebraska does not have a specific price-gouging law, there is a state statute that says suppliers are in violation if they commit an “unconscionable act” during consumer transactions. Nothing turned up by the panel, it appears, shocked its collective conscience.

In fact, Nebraskans fared better than consumers in other states, according to Ernie Goss of Creighton University, one of the three professors who conducted the study.

Relative to wholesale prices, retail prices for unleaded gasoline rose faster nationally than in Nebraska cities during September and October of last year, according to the study. The task force looked at price changes at about 650 stations in 20 cities using information from the Oil Price Information Service.

Predictable reasons for the price spikes in Nebraska, consistent with those most commonly blamed for increases nationally, were cited: Higher oil prices, reduced refining capacity made worse by hurricanes and an increasing dependence on imported oil.

As wholesale prices rose so did retail prices — as well as the difference between the two, or the margins. On average, Nebraska fuel retailers increased the difference between what they bought fuel for at the wholesale level and the prices they set at the pump by 11 cents per gallon between mid-August and late October, compared to the same period in 2004. While that increase in margins between wholesale costs and price set at the pump may seem curiously high, the panel concluded there were good reasons for the increase and that they were below the national average of 13 cents.

“In part, some increase in margins would be expected in a period of rising fuel prices,” the study says. “For example, charges to vendors from credit cards would rise as the price of gasoline rises.” Also, costs of gasoline delivered to stations increased more than wholesale prices at terminals.

Still, the study continued, “such factors … may not explain the entire 11 cent increase in margins on average across the 20 cities.”

For some retailers, 11 cents could translate into a doubling of their margins, which can hover around a dime a gallon.

“I can’t possibly say they are wrong,” Chuck Salem, president of Salem Oil, which owns 11 convenience stores in Lincoln, said of the 11-cent mark. “All I can say is that is not the experience of my little company.”

Margins rose fastest in Lincoln, Alliance, Humboldt, Ogallala and South Sioux City. In the days after Katrina slammed the Gulf Coast on Aug. 29, Lincoln and Omaha had some of the biggest spikes in margins, dwarfing those of smaller cities.

On Sept. 2, for example, the peak retail prices in Lincoln were 23 cents per gallon more than wholesale prices, and in Omaha the difference was 27 cents. By comparison, the difference in North Platte on the same day was just 8 cents.

The study does not provide specific reasons why margins in some cities increased more than others.

When wholesale prices began to drop, retail prices in Omaha dropped as rapidly, according to the study. Not so in Lincoln and other cities in the study. Their margins actually increased as wholesale prices began to fall.

“Uncertainties as to the future direction in wholesale price, coupled with the desire to recoup higher costs of existing inventory, may help explain this,” the study says.

Salem said higher costs during extraordinary times like the post-Katrina period justify making a little extra money when wholesale prices begin to drop.

“We may not bring prices down as fast as (wholesale prices), because we need to recoup margins when prices went up so fast,” Salem said.

Not covered in the report is why fuel prices in Nebraska immediately after Katrina spiked more than other states. According to the American Petroleum Institute, Nebraska was the only state west of Missouri where gas prices jumped more than 50 cents per gallon in the roughly one week following Katrina.

The study instead focused on prices during a longer, two-month period.

One of the three professors who did the study, Eric Thompson of the University of Nebraska-Lincoln, acknowledged that prices in Nebraska were higher than many states after Katrina.

But, said Thompson, director of the Bureau of Business Research at UNL, “they fell much more quickly in Nebraska.”

Reach Nate Jenkins at 473-7223 or njenkins@journalstar.com.

Who did the study

Members of a panel appointed by Attorney General Jon Bruning to investigate fuel price in Nebraska:

* Ernie Goss, a Creighton University economics professor

* Edward Morse, a Creighton University law professor

* Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln and an associate professor of economics