FTC finds no manipulation in post-Katrina gas prices

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In a report mandated by Congress, the Federal Trade Commission said this week that its investigation into post-Katrina gas prices revealed no illegal market manipulation.

The FTC analyzed financial data for 30 refiners, 23 wholesalers and 24 single-location retailers. It found seven refiners, two wholesalers and six retailers had higher average gasoline prices in September 2005 compared to August. These higher prices were not attributable to higher costs or to national or international market trends. Further study indicated that factors such as regional market trends explained the pricing in nearly all the cases, the FTC reported Monday, May 22.

Harry Reid, U.S. Senate Democratic leader, said the investigation showed only that “federal investigators don’t have the tools they need to protect the American people from gas price gouging.” The Nevada senator urged passage of an anti-gouging bill introduced by U.S. Sen. Maria Cantwell, D-Wash.

The report vindicated refiners, said Bob Slaughter, president of the National Petrochemical and Refiners Association. Mergers and acquisitions actually have increased U.S. refining capacity, Slaughter said.

The report defies belief, said Tyson Slocum, energy program director for the consumer group Public Citizen. “The FTC has become increasingly political, losing its traditional independence and favoring big oil, and the agency is too quick to point blame at small retailers rather than large refiners, despite the fact that a May 2004 U.S. Government Accountability Office report found that mergers in the oil industry have led to higher prices,” Slocum said.