Tags: Senators Want FTC to Probe Oil Refiners for Price Fixing

Senators Want FTC to Probe Oil Refiners for Price Fixing

Tuesday, 17 May 2011 01:54 PM

A group of U.S. senators on Tuesday will ask the Federal Trade Commission to investigate whether oil refiners are cutting back their gasoline production in order to keep pump prices high.

The senators, including Senate Majority Leader Harry Reid, plan to send a letter to the FTC chairman seeking the probe, citing recent Energy Department data showing that U.S. refiners are operating only at about 82 percent capacity, according to a congressional aide.

The senators will not name any specific oil refining companies of wrong doing, but instead accuse the refining industry as a whole, the aide said.

While refiners are operating at lower capacity levels, U.S. gasoline inventories remain high, rising almost 1.3 million barrels to about 206 million barrels, based on the department's most recent weekly data.

Bill Day, a spokesman at Valero Energy Corp, the largest U.S. independent refiner, said oil plant capacity is low now because refiners do annual maintenance in the spring to gear up for higher demand during the summer driving season.

Refiners would be missing out on big profits right now if they were holding back their gasoline production, because profit margins for making oil products are high.

"It would be self defeating to limit production at a time of high margins," he said.

U.S. refinery margins in the Gulf Coast for example were $32.91 per barrel last week, much higher than they were last year according to Credit Suisse.

The FTC is already part of a new government task force requested by President Barack Obama to go after fraud and manipulation in energy markets.

The request for a price-fixing investigation comes as U.S. gasoline prices fell for the first time in eight weeks, according to government data released on Monday.

Energy analysts said they expected retail gasoline prices to fall significantly over the next few weeks, possibly as much as 50 cents a gallon.

The savings for consumers is due to the sharp decline in U.S. crude oil prices , which have fallen about $16 a barrel since the beginning of the month.

U.S. wholesale gasoline prices on Monday fell below $3 a gallon for the first time since March on concerns of weaker demand and signs that oil refiners would be spared from flooding along the Mississippi River.

Officials at the National Petrochemical and Refiners Association, the trade group for U.S. oil refiners, could not immediately be reached for comment.

© 2017 Thomson/Reuters. All rights reserved.

   
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A group of U.S. senators on Tuesday will ask the Federal Trade Commission to investigate whether oil refiners are cutting back their gasoline production in order to keep pump prices high. The senators, including Senate Majority Leader Harry Reid, plan to send a letter to...
Senators Want FTC to Probe Oil Refiners for Price Fixing
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2011-54-17
Tuesday, 17 May 2011 01:54 PM
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