Why Tar Heels got hosed at the pump.

• Position: ECONOMIC OUTLOOK - Interview

Looking for reasons why gasoline prices here are so much higher than a year ago and so much higher than in neighboring states? Blame speculators, refinery-ravaging hurricanes, the state's motor-fuel tax and yourself, says Gary Harris, executive vice president of the North Carolina Petroleum Marketers Association. And here's a tip for handling the next crisis: Do as he says, not as he did.

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BNC: What happened after Katrina?

Harris: The gasoline pipelines coming out of the Gulf Coast were shut down. That's something we've never had to deal with before--North Carolina being completely cut off. Katrina hit on a Monday, and we started receiving product late the following Wednesday or Thursday. We were supported only by existing inventory until that time. The Colonial pipeline is the most important source of product for southeastern states. It runs from Houston to New York, and the only refineries feeding it south of North Carolina are on the Gulf Coast. Gasoline runs north only in that pipeline, so all the southeastern states are in the same boat.

What specifically caused the price spikes?

The wholesale cost. We were getting changes in pricing from oil companies multiple times a day, which is very odd. Usually the price changes twice a day. What made it worse was speculation on crude-oil prices.

Why the speculation?

Just the concern that supply was going to be extremely tight or not there at all.

Was some of the increase unjustified?

The price of crude oil has been out of line since before Katrina. Demand has gotten supply so tight worldwide--that's the driving factor in all the speculative markets. And yeah, the price they've bid it up to is higher than it should be.

Why are gasoline prices higher here than in neighboring states?

Price variances can be blamed a lot of times on tax. Our motor-fuel tax rate ranges from 12 to 20 cents higher than those of neighboring states. Other states have to vote on a motor-fuel tax increase. Ours is automatic. Whenever the wholesale price rises, our tax does also. We haven't had a decrease since January 2003, and it was only two-tenths of a cent. The last tax increase was 1.5 cents on Jan. 1, 2005.

Where does our motor-fuel tax rank?

We're the fifth-highest in the nation at 27.35 cents a gallon. The highest is Rhode Island at 31 cents. We're anticipating a significant tax increase on Jan. 1 of 3 to 4 cents a gallon.

Why is our rate set so high?

We have one of the largest state-maintained...