FTC to investigate gas price gouging

[TastesLikeChicken]

Will anything actually come of this? Hard to say. But at least the .gov is trying to make a show of it.

http://www.msnbc.msn.com/id/9424585/

FTC says it is investigating gas price gouging
Democratic governors ask if companies took advantage of Katrina crisis

MSNBC News Services
Updated: 11:01 a.m. ET Sept. 21, 2005
WASHINGTON - The U.S. Federal Trade Commission is investigating whether gasoline price profiteering has occurred and if oil companies have constrained refinery capacity to manipulate fuel prices, an agency official said on Wednesday.

?A determination that unlawful conduct has occurred will result in aggressive law enforcement activity by the FTC,? John Seesel, an FTC associate general counsel, told a Senate Commerce Committee hearing.

Separately, the Government Accountability Office said recent retail gasoline prices have risen faster than crude oil prices.

On Tuesday, eight Democratic governors asked President Bush and congressional leaders to investigate possible gasoline price gouging in the aftermath of Hurricane Katrina.

In a letter, the governors urged an investigation into ?excessive profits being made by oil companies who are taking advantage of this national crisis.?

The letter was signed by the governors of Oregon, Wisconsin, Michigan, Illinois, New Mexico, Iowa, Montana and Washington. It also urged Congress to refund any excessive profits to consumers.

The letter cited a study by University of Wisconsin economist Don Nichols that found the hurricane was not entirely to blame for high gas prices.

Historically, Nichols said, the markup between the price of a gallon of crude and a gallon of gasoline is about 85 to 90 cents a gallon, including refining, distribution and taxes.

The study estimated that for pump prices to reach $3 a gallon, the price of crude oil would have to be about $95 a barrel, but crude prices have been holding around $65 a barrel, and Katrina has not caused a surge in crude oil prices.

?The disconnect between gasoline and crude oil prices is quite remarkable,? Nichols said.

Ed Murphy of the Washington-based American Petroleum Institute said refining capacity was tight before Katrina and the storm reduced it further by knocking out some refineries.

?That put upward pressure on petroleum prices,? he said. ?It?s a no-brainer.?

White House spokesman Allen Abney said the president had not seen the governors? letter Tuesday, but Bush has asked Attorney General Alberto Gonzales to handle any price-gouging allegations.

Last week, the Senate passed legislation requiring the Federal Trade Commission to investigate accusations of gasoline price-gouging.

 

[BDawg]

Gas price gouging? I thought the Republican mantra was "whatever the market will bear."

 

[conjur]

You hit it on the head, TLC..."a show of it"

 

[TheSlamma]

SUV sales must have raised a flag.

 

[racebannon]

The FTC lacks statutory authority to take action against price gouging. The FTC's authority under antitrust laws is to investigate price increases that are the result of collusion among competitors.

 

[Todd33]

Election time must be getting near, the toothless dogs are barking.

 

[Pabster]

And the toothless dog is a democrat. 😛

 

[conjur]

http://marketplace.publicradio.org/shows/2005/09/20/PM200509207.html

Today the oil cartel announced it's going to release 2 million more barrels of oil every day. And it's going to build badly needed refineries to crank out gasoline and heating fuel. Consumer advocate Jamie Court is not impressed.

Gaming the system by intentionally not building new refineries? Goes in hand with some of the refinery closures that have occurred.

 

[Strk]

The FTC sure knows how to stay on top of things. They launched investigations here the week everything seemed sporadic. (You know, the 30-50¢ difference between gas stations only a mile or two a part.)