The U.S. government has investigated gasoline prices about 30 times over the last 20 years but oil companies were never found to have “fixed” prices. The most recent extensive study of gasoline price competition was released in August 2007 by the Federal Trade Commission (FTC) and U.S. Justice Department’s Antitrust Division. The report concluded that market factors explain increases in the national average retail price for gasoline during the spring and summer of 2006.

According to a report summary released by the two federal agencies, “the price increases during the spring and summer of 2006 were attributable to six factors:

(1) Seasonal effects of the summer driving season;
(2) Increases in the price of crude oil;
(3) Increases in the price of ethanol;
(4) Capacity reductions stemming from refiners’ transition from the fuel additive methyl tertiary-butyl ether to ethanol;
(5) Refinery outages resulting from hurricane damage, other unexpected problems or external events, and required maintenance; and
(6) Increased consumer demand for gasoline beyond the seasonal effects of the summer driving season.

The determination that the price increases were attributable to these six factors also supports the conclusion that the increases did not stem from violations of the antitrust laws.”

This latest study follows another exhaustive FTC study of alleged market manipulation to increase gasoline prices in the weeks following the Huricane Katrina. The report, released in May 2006, included these findings:

• No evidence that refiners manipulated prices by running refineries below full production capacity, restricting gasoline production or diverting gasoline from the U.S. market to less lucrative foreign markets.
• No evidence to suggest refinery expansion decisions over the past 20 years resulted from either unilateral or coordinated attempts to manipulate prices.
• No evidence to suggest companies reduced inventories to increase or manipulate prices or exacerbate price spikes.
• No situations that might allow one firm – or a small collusive group – to manipulate gasoline futures prices by using storage assets to restrict gasoline movements into New York Harbor, the key delivery point for gasoline.