Photo Courtesy of AAA
“Gas prices should come back down to earth just as fast as they went up, but right now, my worry is they will not fall as fast as they should,” Sen. Schumer said.
By Forum Staff
As gas prices soar this hurricane season, Senate Minority Leader Charles Schumer has asked federal authorities to establish a gouge watch effort.
In a recent letter to Acting Federal Trade Commission Chairwoman Maureen Ohlhausen, New York’s senior senator noted the quick rise in prices at the pump in the city and on Long Island both ahead of and during Hurricanes Harvey and Irma, and cited the potential of a very slow fall of those same prices now that things are getting back to normal, also known as market-clearing.
“In terms of this nation’s supply and demand for gasoline, Hurricanes Harvey and Irma were short-term disruptions that really shouldn’t have a long-term impact on prices at the pump,” Schumer said. “Gas prices should come back down to earth just as fast as they went up, but right now, my worry is they will not fall as fast as they should. The only thing that makes a devastating natural disaster worse is the idea that that Big Oil could be making a buck off of the mess and hosing consumers, even after the storm has passed us by and the recovery has begun. That is why I am asking the FTC to launch a ‘gouge watch’ with oil producers, transporters, and refiners alike.”
According to the American Automobile Association, the average price of gas in the five boroughs is currently $2.95, and the average price of gas on Long Island is $2.84 – a 13-percent increase from before the storms. Schumer said that the FTC should prepare to take a close look into whether oil companies are taking advantage of consumers.
Schumer also pointed out that while the FTC has limited powers regarding gas price gouging, there is precedent for the agency to put pressure on the petroleum industry and see results – which is what a gouge watch would do.
For example, in 2011, in light of increases in crude oil and refined petroleum product prices, the FTC opened an investigation to “determine whether certain oil producers, refiners, transporters, marketers, physical of financial traders, or others engaged or were engaging in practices that have lessened or may lessen competition,” Schumer recalled. That same investigation also looked at the wholesale price of crude. The goal of the investigation was to determine if Section 5 of the FTC Commission Act was being violated.
The senator said that that investigation also involved coordination with the Bureau of Economics, and resulted in several actions and scrutinized transactions within the crude industry that aimed to maintain a truly free market. Schumer said a gouge watch by federal officials would put Big Oil on notice and allow the new administration and consumers to feel more confident about the return of price-stability within the fuel market.
