WASHINGTON – U.S. regulators looking into the soaring price of gasoline have found no evidence that oil companies colluded to run up pump costs, a top official said April 7.
“To date, we have identified no instances of collusion between petroleum companies,” William Kovacic, general counsel of the Federal Trade Commission, told the Senate Judiciary antitrust subcommittee.
“That does not mean that collusion cannot occur, which is why the agency continues to be vigilant in pursuing its enforcement mission,” Kovacic added.
The Senate panel held a hearing on rising gasoline prices, which the Energy Department said hit a record high this week of $1.78 a gallon.
Kovacic said the FTC is monitoring wholesale and retail gasoline costs in cities throughout the United States looking for “pricing anomalies.”
Rising gasoline prices reflect high crude oil costs, tight gasoline inventories and strong demand.
Kovacic pointed out that changes in crude prices account for about 85 percent of the swings in gasoline costs, while crude prices are determined most notably by oil production levels set by OPEC.
The cartel did not help consumers when it voted last week to cut oil output by 1 million barrels a day.
U.S. lawmakers have demanded the Bush administration get tough with OPEC.
“OPEC’s ability to brazenly raise prices and fill its coffers is in part a result of the administration’s inability to engage and influence oil-producing nations to cooperate with U.S. interests,” said Democratic Sen. Charles Schumer of New York.
“The president, who himself has a long history with the oil industry, had promised the American people that he could ‘jawbone’ OPEC into not raising prices. Sadly he has failed,” said Democrat Patrick Leahy of Vermont.
Republican Larry Craig of Idaho said Congress was partly to blame for high gasoline prices, because lawmakers failed to pass energy legislation to drill for oil in the Arctic National Wildlife Refuge and reduce U.S. dependence on foreign crude.
Consumer groups trace high gasoline prices to a wave of oil company mergers in the 1990s that put more U.S. refineries in the hands of fewer competitors.
“While OPEC cuts have not helped the situation, a lot of the blame rests with American oil companies squeezing more profits out of American consumers,” said Mark Cooper of the Consumer Federation of America.
John Felmy, chief economist with the American Petroleum Institute, said recent gasoline price spikes are due to strong fuel demand as the American economy grows.
U.S. gasoline use during the January-March period hit a record of nearly 8.8 million barrels per day, the Energy Department said on Wednesday.
In a related matter, the FTC said it is evaluating Royal Dutch/Shell Group’s decision to shut down an oil refinery in California, but has not implemented an official investigation.
Democratic Sen. Ron Wyden of Oregon asked the agency in February to investigate after raising concerns that the planned Oct. 1 closing of the Bakersfield, California, refinery would hurt competition and boost West Coast gasoline prices.
“The issues that you have raised are very important to this agency and will be seriously considered as the agency evaluates the situation with respect to the Bakersfield refinery and determines what course of action, if any, may be warranted,” FTC Chairman Timothy Muris said in a letter Tuesday to Wyden.
Source: Reuters