LaHood seeks gas probe - Lawmaker hopes to find reason for higher fuel prices

www.pjstar.com March 5, 2003 By OMAR SOFRADZIJA of the Journal Star

PEORIA - Skyrocketing gasoline and natural gas prices have U.S. Rep. Ray LaHood calling for a federal investigation to ensure the hikes are being driven by something other than the type of "profiteering on public fears" that was seen here on Sept. 11, 2001.

In a letter dated Tuesday to Federal Trade Commission Chairman Tim Muris, LaHood, a Peoria Republican, urged the FTC to "proactively address this matter," saying he was "particularly concerned about public perception" about the reason for sharp price spikes.

"I'm really distressed about the high price of gasoline," LaHood said in a phone interview. "I want to make sure that if gas prices are going up, it's because of things we have no control over, not that some of these gas companies are out to take advantage of a situation."

LaHood did not say price-gouging was afoot; rather, he wanted scrutiny to guarantee that it isn't and won't be. "I want the public to know somebody is riding herd on this situation."

In calling for an inquiry, LaHood joins a growing list of federal legislators and state attorneys general who in recent weeks have asked for FTC action. And he echoes an earlier call by the AAA-Chicago Motor Club for service stations statewide to show restraint and avoid "panic pricing."

On Tuesday, the average cost of regular-grade gasoline in the Peoria area was $1.73 per gallon, a record high for this time of year that is up 16 cents from one month ago and 48 cents from one year earlier, according to AAA.

That mirrored major per-gallon price increases in Illinois ($1.72, up 53 cents from one year earlier) and nationwide ($1.68, up 54 cents), according to AAA.

Low crude oil reserves, speculation of a possible war with Iraq and political instability in Venezuela - a major producer of U.S.-bound crude - have been blamed for much of the cost increases in both gasoline and natural gas.

"Natural gas is the primary source of energy for residential heating in Illinois, and I am concerned that manipulation of prices could severely impact my constituents, especially the elderly, many of whom live on fixed incomes and cannot afford to pay artificially high heating costs," LaHood's letter said.

The FTC did not immediately return a call seeking comment on LaHood's request.

LaHood's letter cites Sept. 11, 2001, as a worst-case scenario for local gas pricing, when "a few bad apples profiteering on public fears" raised their prices more than twofold.

On that day, several Casey's stations in west-central Illinois which started the day in the $1.70 range sold gas at $4 or more per gallon in what the stations later admitted were unjustified and panic-induced hikes.

That admission came as part of a settlement with then-Illinois Attorney General Jim Ryan, who sued the stations for price-gouging.

The office of current Illinois Attorney General Lisa Madigan - who was elected to office last fall - is keeping an eye on Illinois pump prices, but believes the current market situation would be best reviewed by the FTC.

"We would encourage the FTC to look into this," said Madigan's press secretary, Melissa Merz.

"We are monitoring prices statewide and keeping track of it," she said. "We see it's a very volatile market right now. Price volatility does not necessarily mean unlawful conduct."

"However, we understand why people are concerned, and should the attorney general determine gas prices are violating consumer fraud laws, she will act appropriately," Merz said.

LaHood said people in his district who believe they're seeing price-gouging or price-fixing can call his office to complain.

"If the public believes there is some kind of activity where gasoline station owners or oil companies are trying to really increase prices to take advantage of the situation, they ought to report it to my office," he said. "People have been calling" to complain already.