FTC to Investigate Possible Price Gouging
WASHINGTON, D.C. -- The Federal Trade Commission (FTC) has begun an investigation to determine whether oil and gasoline prices have been manipulated. FTC head Jon Liebowitz announced the probe in a letter he wrote to U.S. Sen. Jay Rockefeller, (D-W.Va.).
Liebowitz said an investigation is necessary because refiners' margins have risen 90 percent from January to May of this year, while production capacity dipped 7 percent from 2010, to 82 percent, according to a USA Today report.
Liebowitz made the following comments in his letter to Rockefeller: "In light of these and other developments, the commission has opened an investigation and has authorized the use of a compulsory process to determine whether certain oil producers, refiners, transporters, marketers, physical or financial traders, or others (1) have engaged or are engaging in practices that have lessened or may lessen competition -- or have engaged in or are engaging in manipulation -- in the production, refining, transport, distribution or wholesale supply of crude oil or petroleum products; or (2) have provided false or misleading information related to the wholesale price of crude oil or petroleum products to a federal department or agency."
Charles Drevna, president of the National Petrochemical & Refiners Association, responded with the following statement: "Our members obey the law. Dozens of investigations of gasoline price fixing over the years have generated plenty of headlines and political hyperbole, but have failed again and again to find any evidence of wrongdoing. This will happen again, and the only thing that will be accomplished by this new investigation is to waste taxpayer dollars.
"I look forward to the news conference where the FTC and the elected officials who demanded this investigation will announce that -- like every past investigation -- this new one has found no wrongdoing by America's fuel manufacturers," he concluded.