WASHINGTON – Lawmakers are demanding an investigation into gasoline
prices after thousands of motorists called a government hotline to
complain of price gouging.
The Energy Department reported more than 5,000 calls to its price
gouging hotline Thursday from around the country, although officials
emphasized there was no way to immediately determine how many of the
allegations were valid.
"In Illinois, prices are reported to have shot up 50 cents per gallon
overnight and the state attorney general received more than 500 reports
of price gouging," nine Democratic members of the House Judiciary
Committee wrote the Federal Trade Commission, asking the agency to step
up its review of gas markets.
"These increases go far beyond anything justified or relating to the
market disruptions caused by Hurricane Katrina," wrote Rep. John Conyers
of Michigan, the committee's ranking Democrat, and the other members.
Energy Department spokesman Drew Malcolm said reports of price gouging
were being turned over to the FTC.
The states with the most complaints were North Carolina, Georgia, New
York, Pennsylvania, Texas, Illinois, Tennessee, New Jersey, Michigan and
South Carolina.
Meanwhile, attorney's general from a number of states held a telephone
strategy session to discuss the rapidly escalating fuel prices and
possible investigations into gouging. Prosecution for price gouging is
generally a state matter unless it involves some form of collusion or
other activity in violation of federal antitrust laws.
Gasoline prices jumped 35 cents to 50 cents a gallon overnight from
Wednesday to Thursday in some areas pushing to well over $3 a gallon
after Hurricane Katrina shut down nine Gulf Coast refineries, disrupted
gasoline pipelines to the Midwest and East and stopped 90 percent of the
oil production in the Gulf of Mexico.
"If we get consumer complaints about (gasoline) prices, we'll look at
those complaints to find evidence of anticompetitive conduct," said John
Seesel, the FTC's associate counsel for energy issues.
But Seesel said the FTC has no jurisdiction over an individual gas
station operator raising his price, no matter how high, unless there is
some collusion among retailers. A number of states, however, have
anti-gouging statutes. Following FTC policy, he declined to say whether
any investigation were underway.
On Thursday, Attorney General Troy King of Alabama initiated a private
telephone conference with a number of his colleagues from others states
to discuss strategy in response to the rising gas prices and reports of
huge overnight spikes by some gasoline retailers. No details about the
private discussion were available.
There have been isolated cases of unusually huge price jumps, including
a gas station in Georgia that briefly charged $6 a gallon when
competitors ran out of gas. In Michigan, there was a price jump of
nearly $1 a gallon overnight, although prices then receded, according to
Rep. Fred Upton, R-Mich., who drove around his district on Thursday to
gauge prices.
"Prices are averaging $3.19. It's as high as $3.58 from $2.61 on
Tuesday," said Upton in a telephone interview. "My sense is the supply
and demand equation does not fit a 60-cent (a gallon) increase in the
last 36 hours."
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