Senator Plans to Examine Gas Prices
The Democrat poised to take over as chairman of a Senate investigative panel said he plans to look into the effect of oil industry mergers on the increase in gasoline prices, the Associated Press reported.
"The oil companies need to explain why gas prices have increased so dramatically given that there has been no comparable increase in the per-barrel cost of oil to them," Michigan Sen. Carl Levin told the Associated Press.
An oil industry representative said Sunday that the companies were not conspiring to raise prices, and cited lower output by oil-producing countries and too few U.S. refineries as reasons for the higher prices.
"To suggest people from all these companies got together in a hotel room to set a price or a range of prices, that just wouldn't happen. That is simply not how it works in the real world," said Mike Shanahan, a spokesman for the American Petroleum Institute. "Prices go up and down because of supply and demand."
Federal regulators, in recent reports, found no evidence of price-fixing. The average price of gas has risen more than 20 cents in just six weeks to $1.69 for a gallon of regular unleaded. Prices are up 10 percent from last year, and some analysts predict they could reach $2 in most of the U.S. and possibly $3 in California and parts of the Midwest this summer, the report said.
Levin has already asked the General Accounting Office, the investigative arm of Congress, to examine whether recent mergers have lessened competition and driven gas prices higher.
Over the past two years, mergers have created Exxon Mobil Corp., Chevron Texaco, Royal Dutch/Shell Group and BP Amoco PLC. The pending combination of Tosco Corp. and Phillips Petroleum Co. would create the nation's fifth-largest gasoline retailer.
The FTC earlier this month closed a three-year investigation after finding no evidence that major oil refiners violated antitrust laws in marketing West Coast gasoline. An FTC report released in March that looked into the run-up of Midwestern gasoline prices last summer said some energy producers withheld supplies of gasoline to maximize profits, but found no evidence that companies conspired to raise gas prices.
"The oil companies need to explain why gas prices have increased so dramatically given that there has been no comparable increase in the per-barrel cost of oil to them," Michigan Sen. Carl Levin told the Associated Press.
An oil industry representative said Sunday that the companies were not conspiring to raise prices, and cited lower output by oil-producing countries and too few U.S. refineries as reasons for the higher prices.
"To suggest people from all these companies got together in a hotel room to set a price or a range of prices, that just wouldn't happen. That is simply not how it works in the real world," said Mike Shanahan, a spokesman for the American Petroleum Institute. "Prices go up and down because of supply and demand."
Federal regulators, in recent reports, found no evidence of price-fixing. The average price of gas has risen more than 20 cents in just six weeks to $1.69 for a gallon of regular unleaded. Prices are up 10 percent from last year, and some analysts predict they could reach $2 in most of the U.S. and possibly $3 in California and parts of the Midwest this summer, the report said.
Levin has already asked the General Accounting Office, the investigative arm of Congress, to examine whether recent mergers have lessened competition and driven gas prices higher.
Over the past two years, mergers have created Exxon Mobil Corp., Chevron Texaco, Royal Dutch/Shell Group and BP Amoco PLC. The pending combination of Tosco Corp. and Phillips Petroleum Co. would create the nation's fifth-largest gasoline retailer.
The FTC earlier this month closed a three-year investigation after finding no evidence that major oil refiners violated antitrust laws in marketing West Coast gasoline. An FTC report released in March that looked into the run-up of Midwestern gasoline prices last summer said some energy producers withheld supplies of gasoline to maximize profits, but found no evidence that companies conspired to raise gas prices.