Senate Dems seek FTC investigation into alleged gasoline price fixing

Four Senate Democrats this week asked the Federal Trade Commission (FTC) to investigate whether U.S. oil refineries are purposefully cutting back capacity levels in order to keep gasoline prices high.

Sens. Claire McCaskill (D-Mo.), Charles Schumer (D-N.Y.), Dick Durbin (D-Ill.) and Patty Murray (D-Wash.) cited press reports that this may be happening and told FTC Chairman Jon Leibowitz that this would be a "direct affront" to American consumers.

"At a time when major refiners and oil companies are making record profits and American families continue to struggle with gasoline at record prices, the idea that refiners may be manipulating the market to keep prices artificially high is offensive," they wrote.

"It is incumbent upon the Commission to ensure that the American people are protected from this type of manipulation," the letter continued. "Accordingly, we request that the Commission open a full investigation into these allegations of wrongdoing and to determine the impact this behavior, if confirmed, has on regional and national gasoline prices."

The letter acknowledged that rising oil prices are "certainly a driving factor" behind gas price increases. However, it added that U.S. gasoline use is down, but gasoline inventories are also low, and refineries are using only 81.7 percent of their capacity, down 7 percent from last year.

They also said refiners have seen a 90 percent increase in their margins. "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," they wrote.

McCaskill noted the letter on the Senate floor Tuesday, just before a planned evening vote to end debate on a bill that would raise taxes on oil companies.

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