WASHINGTON – Consumer groups called on policymakers Wednesday to overhaul the energy legislation now going through Congress to bring back competition and stop the “roller coaster” rise in gasoline prices.
The Consumer Federation of America released a report showing gasoline price increases over the past three years are due to higher costs of domestic oil refining and marketing operations,not overseas oil productions.
“The price roller coaster has not been affected by international factors,” said Mark Cooper,director of research at the Consumer Federation of America,at a press conference. Prices go up “when there are very few people competing on the market.”
Gasoline prices rose to record highs around the Labor Day weekend,an average of $1.75 a gallon.
Tyson Slocum,research director of Public Citizen's Critical Mass Energy Program,said that after big oil company mergers,the top five oil companies operating in the United States “control 15 percent of global oil production,50 percent of the domestic oil production and 61 percent of the retail market.”
A spokesman for the American Petroleum Institute,an oil company trade group,disagreed with the analysis.
“There is plenty of competition on the market. This report misuses the facts to paint a picture which is false,” the spokesman said.
The price of gasoline is “heavily influenced by the price of crude oil,” which is set internationally,and the taxes a customer has to pay at the pump,the spokesman said.
“It costs 75 cents to buy a gallon of crude oil,” he said. That plus taxes equals three-fourths of the price at the pump,he said.
Adam Goldberg,a policy analyst for Consumers Union,said the industry needs to invest in more refining capacities instead of keeping gasoline supplies tight and maximizing profits.
“This is all about a market being horribly manipulated for corporate greed to the detriment of hardworking consumers,” Goldberg said. “Through various tactics,the oil companies have done everything they can do to limit supply,raise the prices and force consumers to pay billions more than necessary for an essential commodity.”
The API spokesman said that prices actually went down after the largest mergers began.
Since 1997 when the large mergers began,inflation has accounted for price increases,not mergers,he said.
Prices “were 6 cents less than the period before the mergers – 1990 to 1996. They are not our prices. They are compiled by the government,” he said.
Slocum said that oil and gas industry spent an average of “$50 million a year lobbying Congress and the White House since 2000.”
“Millions of dollars in campaigns seems to buy one immunity,” he said.
However,Cooper said there is hope in the near future,but this “is a long-term problem”
The CFA study recommend a range of policies to relieve pressure on local gasoline markets including rejecting future mergers,considering a windfall profits tax when sharp prices increases occur and considering strategic product reserves in the most vulnerable markets.