Feds Launch Inquiry Into Soaring Gas Prices

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Feds Launch Inquiry Into Soaring Gas Prices

09/04/2003
WASHINGTON -- The Energy Department is investigating whether price gouging was involved in the unusually large gasoline-price jumps that followed the Northeast power blackout and continued through the Labor Day weekend.

Energy Secretary Spencer Abraham yesterday said the department began an inquiry this week to determine whether factors other than normal market conditions played a role in the price increases. If irregularities are found, the information could be turned over to the Justice Department or the Federal Trade Commission, the Associated Press reported.

Gas prices, on a national average, hit a record $1.75 cents a gallon last week, jumping more than 12 cents a gallon from the week before. In some areas, drivers reporting price increases of a dime a gallon overnight.

While gasoline prices normally increase in the days leading up to the heavily traveled Labor Day weekend, Abraham said the recent price spikes "struck me as being unusually large," prompting a decision to look into the matter. He said the investigation was just beginning and that he could not make any judgment on whether there were any improper activities involved or to what extent the blackout influenced prices.

At least seven U.S. and Canadian refineries were briefly shut down because of the Aug. 14 power outage from Michigan to New York state and parts of Canada, according to the report.

Industry officials said at the time the shutdowns should cause only modest price increases, since production resumed fairly quickly and some of the largest refineries were not affected by the blackout. But, between Aug. 18-25, the average retail price for regular unleaded gasoline shot up12 cents a gallon, the biggest one-week increase ever.