Wednesday, May 24, 2006

FTC: No Gas Price Gouging - Again

Surprise Surprise Surprise.

Despite suspicions among consumers about rapidly rising gasoline prices and record oil industry profits, a federal investigation concluded Monday that the jump at the pump over the last year had not been the result of unlawful price manipulation.

The Federal Trade Commission said the sharp increase in fuel costs was attributable to market forces - namely big drops in supply and production and runs on inventories after major damage to refineries, ports and pipelines. In a report that Congress ordered last year after hurricanes struck the nation's refining hub on the Gulf Coast, the commission found no evidence of price collusion or improper reductions of inventory or supplies to increase company profits.

"The evidence collected in this investigation indicated that firms behaved competitively," the commission said.

They did find 15 circumstances that showed individual retailers, refineries etc had pricing that appeared to be gouging, but could be explained, and justified by specific local trends.

Of course, Democrats couldn't stand the results.
But Democrats in Congress, who have been the biggest critics of the commission for the way it monitors the industry, challenged the report's conclusions.

"The F.T.C. white paper on gas price gouging is a whitewash," said Senator Ron Wyden, Democrat of Oregon. "They find substantial numbers of refiners engaged in anticompetitive practices. They don't like the remedy Congress is proposing, namely a law on price gouging. But they just walk away from responsibility and don't propose a remedy themselves."

Senator Charles E. Schumer, Democrat of New York, also criticized the commission.

"It just defies belief that they didn't find price gouging because there is simply no price competition," he said. Mr. Schumer said that the Senate "could do a lot if it had the backbone."

"We could issue subpoenas, we could call in the executives, we could get to the bottom of this," he said. "The problem is that the Senate leadership believes, as the president does, that what's good for big oil is good for America."

Yeah, Chuckles pulling the usual BS. Note that he makes it out that the republicans are for high prices. I'm certain we'd get what we usually do out of a Senate committee investigating the problem. Absolutely nothing. That is unless you've found a way to harness hot air.

Wyden's whining is humorous as well. I would like to know how the refineries managed to raise prices and still sell their product if this was an anti-competitive tactic. No one forced anyone to buy the fuel. They could have bought it from another refinery and had to pay the shipping charges. I don't understand how that is anti-competitive. Still simple supply and demand was functioning. But you can't make political hay with logic.

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