By Ben Geman - 06/20/11 08:54 PM EDT
The Federal Trade Commission is probing whether oil companies and other industries might have engaged in anti-competitive or manipulative practices or provided false information to federal officials.
Commission Chairman Jon Leibowitz disclosed the probe Monday in a letter to Senate lawmakers, who have prodded regulators to scrutinize markets amid the recent run-up in oil and gasoline prices.
The FTC letter notes federal data showing that as of early May, refiners’ margins — or the difference in value between their products and crude oil prices — had increased by more than 90 percent since the beginning of the year, yet refiners were using only about 82 percent of their capacity, a reduction from the same period last year.
The letter states:
“In light of these and other developments, the Commission has opened an investigation and has authorized the use of a compulsory process to determine whether certain oil producers, refiners, transporters, marketers, physical or financial traders, or others (1) have engaged or are engaging in practices that have lessened or may lessen competition — or have engaged in or are engaging in manipulation — in the production, refining, transport, distribution or wholesale supply of crude oil or petroleum products; or (2) have provided false or misleading information related to the wholesale price of crude oil or petroleum products to a federal department or agency.”
Several Democrats in mid-May asked the FTC to investigate whether U.S. oil refineries are purposefully cutting back capacity levels in order to keep gasoline prices high.
Prices have backed off in recent weeks and now average roughly $3.65 per gallon, according to AAA, while prices averaged $2.73 per gallon at this time a year ago.
The commission, in the letter, also notes that it’s committed to working with the multi-agency task force probing petroleum markets that President Obama announced in April.