Posted on 02/21/2003 3:48:36 PM PST by GeneD
Filed at 6:27 p.m. ET
WASHINGTON (Reuters) - Two Midwestern U.S. senators asked the Federal Trade Commission on Friday to investigate the region's soaring gasoline prices and whether consumers are being gouged at the pump.
The average national price for regular unleaded gasoline is up 54 cents a gallon from a year ago and the seventh highest on record at $1.66 a gallon, according to the U.S. Energy Department.
Fuel costs are up even more in the Midwest, where Senators Herb Kohl, Democrat of Wisconsin and Mike DeWine, Republican of Ohio want to know if oil companies are trying to profit from the threat of war with Iraq.
``The causes of the price increases are not entirely clear, but it is critically important to ensure that they are not caused by price-fixing or price gouging by oil companies, gas stations or others within the gasoline supply chain,'' the lawmakers said in a letter to FTC Chairman Timothy Muris.
An FTC spokeswoman said the agency has no plans for a gasoline price investigation, but instead has an ongoing program where FTC staff monitor fuel prices around the country. The spokeswoman said she did know if the program had found any pump pricing anomalies.
``We take these things very seriously,'' she said.
The jump in gasoline prices has coincided with high crude oil costs that reflect market fears that a war with Iraq would disrupt Middle East oil supplies. Crude oil prices account for about 40 percent of the cost for gasoline.
However, lawmakers and consumer groups say pump prices have risen faster than crude oil costs and they accuse oil firms of gouging.
The American Automobile Association said high gasoline prices, which topped $2 a gallon for regular gasoline in San Francisco this week, are not justified by current market conditions.
Democratic Sen. Charles Schumer of New York has also asked for a similar FTC investigation.
In their letter to the FTC, Kohl and DeWine cited examples of recent gasoline price spikes in their states, including fuel prices rising as much as 12 cents a gallon in the Columbus, Ohio, area in a single day last week.
DeWine, who is the Republican chairman of the Senate's subcommittee on antitrust, competition policy and consumer rights, said he would do everything in his power to protect consumers from unfair gasoline prices. Kohl is the leading Democrat on the panel.
Oil companies deny wrongdoing and say pump prices reflect current market conditions, including fears of war in Iraq, low oil inventories and strong consumer demand for petroleum products.
``There have been calls about price gouging by the industry, but the facts don't support those claims,'' said American Petroleum Institute President Red Cavaney at a conference in New York.
``The consumer doesn't understand the complexity of the situation, but only sees the prices at the pump moving up and down,'' he said.
Crude oil and gasoline prices rose sharply on Friday after a barge carrying 100,000 barrels of gasoline exploded at an oil terminal at New York City's Staten Island.
It would appear that the free market has run amok again and we mustn't allow it. I mean, how dare they charge whatever they wish for property that they own.
Of course, we'll allow it. But we daren't let it appear that we'll allow it.
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