Gas Hikes Could Become Annual Event

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United Press International

A consumer group sympathetic to environmental interests said Wednesday the gasoline price hikes of the summer of 2000 could become an annual event unless the federal government intervenes.

The Santa Monica, Calif.-based Foundation for Taxpayer and Consumer Rights released a study that blamed the summer price hikes on “manipulative practices of six oil refineries” and said Congress and the new president will need to pass legislation to prevent the prices from skyrocketing every summer.

Gas prices reached record highs in June 2000, with many parts of the United States getting close to paying $2 per gallon for regular unleaded gasoline and motorists in the Chicago and Milwaukee areas paying as much as $2.30 per gallon.

Additional money paid by motorists in six Midwestern states during the 90-day stretch when gasoline prices were on the rise totaled $3.6 billion.

The study said oil refinery owners deliberately kept low supplies of fuel on hand during the time as a way of driving up prices. Without some sort of action by Congress, there is nothing to stop such actions — and price hikes — from recurring.

“This author is convinced the oil companies will continue to utilize low inventories and reporting which will result in additional price spikes in the future,” the study reads.

Foundation Executive Director Jamie Court noted similar hikes already take place every summer in California.

“They call it ‘refinery heaven’,” he said. “Whoever wins the presidential election, (Democrat Al) Gore or (Republican George W.) Bush — he ought to take a look at this issue.”

The study said Congress should establish a single nationwide standard for gasoline formulations so oil companies can no longer control inventories in ways that cause gas price spikes.

“A single standard would prevent regional refineries from cornering the market in their territories,” Court said.

The foundation also wants Congress to amend antitrust and commodity trading laws to provide for prosecution of corporations that try to create price spikes and to impose limitations on the flow of crude and refined product exports to ensure the multinational oil companies do not take advantage of the United States.

When gasoline prices soared during the early summer, refinery officials blamed the increase on the taxes that local and state governments charged for motor fuel. They also cited the many reformulated fuel blends developed to meet clean air standards as a factor in the price hike.

Court said those factors are just excuses used by refineries to cover up their own conduct.

“We can have cleaner air and cheaper gas,” he said.

Consumer Watchdog
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