Price Hikes Fuel Calls For Probe

wcco.com CBS Feb 24, 2003 11:51 am US/Central (CBS) (NEW YORK) Two senators have asked the Federal Trade Commission to monitor the gasoline market and investigate any possible anti-competitive activity, as a national survey showed gas prices continuing to rise. An industry analyst said Sunday that gas prices increased 7 cents per gallon over the past two weeks, pushing pump prices to near record levels. "The causes of the price increases are not entirely clear, but it is critically important to ensure that they are not caused by price-fixing or price gouging by oil companies, gas stations, or others within the gasoline supply chain," Sens. Herb Kohl, D-Wis., and Mike DeWine, R-Ohio, wrote the FTC. But the national survey indicated the upward pressure on prices might be easing. The average weighted price for gas nationwide, including all grades and taxes, was approximately $1.70 per gallon Friday, according to the Lundberg Survey of 8,000 stations nationwide. That price is within 7 cents of $1.77, the all-time high recorded by the survey on May 18, 2001. Gasoline cost about $1.63 a gallon on Feb. 7, the date of the last Lundberg Survey, an increase of 11 cents over the previous two-week survey. "The pace of gas prices has already slowed," Trilby Lundberg said. "The other indicators show a possible decrease in prices." Increased production in Venezuela as a strike there eases, the approach of warmer weather, and the reopening of various U.S. refineries that had been idled for annual maintenance should help slow or end the price spiral, Lundberg said. Crude oil prices are also up due to fears of a war with Iraq, but if the U.S. goes to war, or if the crisis is resolved, that oil bubble could burst. Prices rose 30 cents a gallon in 1990 after Iraq invaded Kuwait, and then dropped 30 cents in 1991 following the Persian Gulf War, Lundberg said. The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.67 per gallon for regular, $1.76 for mid-grade and $1.85 for premium. CBS News Correspondent Sandra Hughes has reported that, if adjusted for inflation, gas prices are still lower than they were in the 1970's. The Lundberg survey did not reflect what effect, if any, Friday's massive explosion at a fuel storage facility in Staten Island, New York would have on fuel prices. The blast — on a barge stocked with 100,000 barrels of unleaded gasoline near a storage facility that holds 2 million barrels of oil products — pushed crude oil prices up more than a dollar in trading Friday. Heating oil and gasoline futures also surged. Prices eased somewhat after analysts and traders realized the loss of gas supplies would pose only a short-term problem for the Northeast. The United States uses about 13 million barrels of oil a day. Making their case for an FTC probe, Kohl and DeWine cited examples like a recent spike in gas prices at Akron, Ohio filling stations from $1.53 a gallon to $1.74 a gallon, in what the senators claimed was a matter of hours. The Federal Trade Commission last probed gasoline pricing practices during a sharp rise in fuel costs during the summer of 2000. The following March, the commission reported that it had found "no credible evidence of collusion or other anticompetitive conduct by the oil industry." However, the FTC did find that the price rises were due, in part, to factors controlled by the fuel companies.