The U.S. Federal Trade Commission, responding to a request from five Democratic senators, said it is “always on the lookout for potential price fixing” in the gasoline sector.
The FTC will “take action whenever we find wrongdoing,” FTC Chairman Jon Leibowitz said in an e-mailed statement today.
The senators sent a letter to Leibowitz earlier in the day asking the FTC to look into the gasoline price increases. The lawmakers said recent reports indicated U.S. refiners are restricting production to inflate prices.
“It is incumbent upon the commission to ensure that the American people are protected from this type of manipulation,” the senators said in the letter.
Signing it were Senate Majority Leader Harry Reid of Nevada and Senators Claire McCaskill of Missouri, Charles Schumer of New York, Patty Murray of Washington and Richard Durbin of Illinois.
John Felmy, chief economist for the American Petroleum Institute, the largest U.S. oil and gas trade group, said there is “no support” for allegations of price fixing. Refiners are producing record or near-record levels of gasoline, he said in an interview.
The senators’ letter “is an attempt to distract attention from failed energy policy,” Felmy said in a statement. “The Federal Trade Commission was already closely monitoring gasoline prices, and no evidence has surfaced to suggest supply and demand aren’t the primary forces driving them.”
The FTC’s Bureau of Economics regularly scrutinizes price movements in about 20 wholesale regions and almost 400 retail points across the country. FTC attorneys and economists respond to suspect pricing episodes as they arise.
The agency has never found that oil companies violated price-manipulation laws in more than 20 years of investigations, said Marc Schildkraut, the FTC’s assistant director in charge of the energy sector during President George H.W. Bush’s term.
“Whenever gas prices reach new heights, the FTC opens an investigation,” said Schildkraut, a Washington-based partner at Dewey & LeBoeuf LLP.
Since 2001, the agency has released five reports on price manipulation.
In 2006, the FTC looked into possible price fixing after Hurricane Katrina hit the Gulf Coast. The agency concluded that market factors contributed to increases in retail prices for gasoline, including refinery outages resulting from the hurricane as well as the summer driving season.
President Barack Obama announced last month an interagency task force to investigate potential fraud in oil markets as a possible cause for the run-up in gas costs.
The average price for a gallon of regular gasoline was $3.944 yesterday compared with $2.867 a year ago, according to AAA’s daily fuel report.