|
|---|
Topic: Gasoline
|
| Agency: Federal Trade Commission
Date: 1 September 2011 |
“This report is part of our ongoing focus on competition in energy markets. The American people need to understand why they often pay so much for gasoline,” FTC Chairman Jon Leibowitz said.
“Our report spells out the factors that determine what consumers pay at the pump, and why gas prices seem to ‘rocket up’ but ‘feather down.’ In addition to the price of crude oil, by far and away the largest factor in gasoline prices, the report looks at factors such as how fast retail gas prices adjust to changes in wholesale gas and crude oil prices; refinery profit margins; and the possible impact of futures speculation. It also examines the effect of OPEC – a cartel that tries to restrict oil output, and which would be a criminal conspiracy if it were run by companies rather than countries.”
Separately, but as part of that same mission, the FTC also is investigating possible antitrust violations and market manipulation by refineries.
The new staff report builds on previous FTC staff reports to inform the public and policymakers about petroleum industry issues in general, and gasoline prices in particular. It updates parts of a 2005 FTC report on gasoline price factors, and parts of a 2004 report that examined mergers, structural change and antitrust enforcement in the petroleum industry. The new report also summarizes and comments on new learning from academic and other researchers on pertinent topics.
In addition to examining the factors that affect gasoline prices, the report focuses on changes in gasoline prices over time. Specifically, it looks at whether prices increase faster when costs go up, but fall more slowly when costs go down – a phenomenon known as “rockets and feathers.” The report also examines another phenomenon known as “price cycling” – unusual gas price change patterns seen in certain geographic areas.
Findings include:
The FTC has been investigating petroleum-related antitrust matters for 35 years. The agency has held public hearings, and has done extensive reports and economic studies on the industry. Since 2002, the FTC’s staff has monitored weekly average retail gasoline and diesel prices in 360 cities nationwide to search for pricing anomalies that might indicate anticompetitive conduct and to take action where appropriate.
The FTC is also a member of the Oil and Gas Price Fraud Working Group of the Financial Fraud Enforcement Task Force. The working group is an interagency effort by state and federal enforcement and regulatory agencies to ensure a comprehensive approach in monitoring and sharing information about the oil and gas markets.
The Commission vote to issue the Report was 5-0. It can be found on the FTC’s website and as a link to this press release.
The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau of Competition about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook and follow us on Twitter.
(FTC File No. P115701)
(Gas Price Factors 2.wpd)