That’s a question that five U.S. Senators are asking the Federal Trade Commission to answer. On Tuesday, Senators Harry Reid, Charles Schumer, Patty Murray, Dick Durbin, and Claire McCaskill sent a letter to the FTC to look into the potential price fixing of gasoline by U.S. refiners.
The senators are concerned about recent reports suggesting that refiners are reducing U.S. gasoline stockpiles in order to artificially keep prices high as well as inflate their bottom line. According to the Energy Information Administration, U.S. refiners are only using 81.7% of their capacity, which is a decline of 7% from last year. The senators wrote that “while some have argued that this increase is due to potential impacts from recent flooding along the Mississippi River, this cannot justify the steady increases in their margins since January of this year.”
Unsurprisingly, President of the National Petrochemical & Refiners Association, Charles Drevna, issued a statement that was critical of the senators’ letter. Drevna argued that the letter was “political theater” and that “dozens of investigations of gasoline price fixing over the years have generated plenty of headlines and political hyperbole, but have failed again and again to find any evidence of wrongdoing.”
Abbey Spanier will continue to monitor these developments and will let you know if the FTC beings an investigation into U.S. refiners.