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WASHINGTON -- U.S. consumers have spent an extra $120 billion, or an average of $146 per passenger car, this year because of the jump in gas prices, the Government Accountability Office (GAO) told Congress yesterday, Reuters reported.
This week, the national price for regular unleaded gas hit a record $3.22, up $1.05 since the beginning of February, according to the Energy Department.
"Spending billions more on gasoline constrains consumers' budgets, leaving less money available for other purchases," Thomas McCool of the GAO told the House Oversight and Investigations Committee at a hearing on the cause of record prices.
In line with many other energy experts, McCool said the GAO found that current high gas prices are the result of offline oil refining capacity, strong gasoline demand and lower fuel inventories. Many lawmakers blame the lack of oil industry competition from mega oil company mergers.
McCool said company mergers in the 1990s caused a rise in wholesale gasoline prices during that time, but that the agency hasn't examined mergers that occurred since 2000 and therefore couldn't gauge the effect on current fuel prices. But, he said "These mergers would further increase market concentration nationwide since there are now fewer oil companies."
William Kovacic of the Federal Trade Commission (FTC) said his agency is closely monitoring the U.S. gasoline market for any unusual moves in prices.
"Because gasoline consumers typically do not reduce their purchases substantially in response to price increases, they are vulnerable to substantial price increases," he said at the hearing.
Speaking to reporters beforehand, he wouldn't comment on whether the FTC has found that oil companies have overcharged customers in the current price rise. However, he said that the FTC has found that unusual movements in gas prices "typically have a business-related cause," such as changes in crude oil costs, refinery issues or pipeline disruptions.
Oil companies have noted that more than 30 previous government investigations into alleged gasoline profiteering has proven that the industry did nothing illegal.
In other petroleum news, the U.S. government is one step closer to filing a lawsuit against the Organization of the Petroleum Exporting Countries (OPEC), as the House of Representatives overwhelmingly passed a vote that will allow the government to sue OPEC about oil production quotas, The Associated Press reported.
"We don't have to stand by and watch OPEC dictate the price of gas," said Judiciary Committee Chairman John Conyers (D-Mich.), the bill's chief sponsor. Coyers also accused OPEC of engaging in a "price fixing conspiracy" that has unfairly driven up the price of crude oil and, in turn gasoline, he told the AP.
The measure would change anti-trust laws, allowing the Justice Department to sue OPEC member countries for price-fixing. The bill also removes the immunity given a sovereign state against such lawsuits, according to the AP.
However, the White House objects to the bill, stating it could disrupt supplies and lead to higher costs at the pump, the AP reported.
The White House stated President Bush will be advised to veto the bill should it pass Congress, as potential suits could spawn retaliatory measures and "lead to oil supply disruptions and an escalation in the price of gasoline, natural gas, home heating oil," the report stated.
The measure passed 345-72, and a similar bill is waiting in the wings of the Senate, the report stated.