Apr 25, 2006 7:32 am US/Eastern
President To Launch Investigation Into Oil Prices
WASHINGTON (CBS) ―
The White House says President Bush will ask the Energy and Justice departments to investigate whether oil prices have been illegally manipulated.
Bush and lawmakers returning from a two-week break are trying to address American outrage over soaring gasoline prices.
Republicans are worried that voters will punish the party in power. Democrats are making plans for that to happen.
House Speaker J. Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., sent the president a letter Monday, calling on him to conduct an intense investigation into whether there is any "price-fixing, collusion, gouging and other anti-competitive practices" that are helping to drive up gasoline prices, reports CBS News correspondent Bob Fuss.
"Given the severity of the current situation regarding gas prices, we believe that the Attorney General and the Federal Trade Commission should devote all necessary resources to expedited review of complaints of price gouging against wholesalers or retailers of gasoline and other distillates," the letter said. "We believe that protecting American consumers in these unprecedented market conditions is of paramount importance."
Democrats have been asking for such an investigation for years. Just last year, Republicans shepherded an energy bill giving more tax breaks to the big oil companies, reports Fuss. Now they want the Justice Department to go after them.
The Senate is working on a bi-partisan bill nicknamed "NOPEC" to scrutinize big oil mergers and allow OPEC nations to be sued if they conspire to fix prices, reports CBS News correspondent Sharyl Attkisson.
"It's a long term response," Sen. Richard Durbin, D-Ill. told Attkisson. "Going after Saudi Arabia for fixing prices, can you imagine how long that lawsuit would go on?"
Last week, crude-oil prices hit record highs and average gasoline prices nationwide neared $3 a gallon — up an average of nearly 25 cents per gallon in the past two weeks, according to a survey released Sunday. Self-serve regular averaged $2.91 a gallon, up from $2.67 two weeks ago, said Trilby Lundberg, who publishes the nationwide Lundberg Survey of 7,000 gas stations.
Lundberg blames the increasing prices of crude oil and the conversion to a new additive formula for the high gasoline prices, but there may be a silver lining.
"If crude oil prices don't rise further, then gasoline prices are really set to peak quite soon, because a lot of refining capacity is out of service temporarily, to get ready for our summer demand, and from the damage exerted last year by the hurricane," she told CBS Radio News.
Over the weekend, Mr. Bush repeated his State of the Union promise to wean America from dependence on oil, CBS News senior White House correspondent Bill Plante reports.
"We're addicted and it's harmful for the economy and it's harmful for our national security, and we've got to do something about it in this country," the president said Saturday in California.
Sen. Arlen Specter, R-Pa., chairman of the Senate Judiciary Committee, said a windfall profits tax, along with measures to stem concentration of market power among a few select oil companies, could offer eventual relief to consumers hurting at the gas pump.
"I believe that we have allowed too many companies to get together to reduce competition," Specter said Sunday.
"They get together, reduce the supply of oil, and that drives up prices," he said. "In the short run, it's hard to deal with it for tomorrow. But I think windfall profits, eliminating the antitrust exemption, considering the excessive concentration of power are all items we ought to be addressing."
Specter is backing legislation that would strengthen antitrust laws on oil company mergers after his committee held a hearing last month examining the growing consolidation of the oil industry. The nation's largest oil companies, including Exxon Mobil Corp., have denied their industry size has affected prices.
Gov. Ed Rendell on Monday urged federal policy-makers to impose a windfall profits tax on oil companies to curb "profiteering" that he said is causing skyrocketing gasoline prices.
The Democrat said U.S. oil refiners' profits mushroomed from less than 23 cents a gallon in 1999 to 99 cents a gallon in 2005, driving up retail prices that have doubled to nearly $3 a gallon in just three years in Pennsylvania.
"There is no excuse for this—absolutely no excuse," he said at a news conference next to the pumps at a local gas station. "It's embarrassing."
Sen. Carl Levin, D-Mich., said he believes gas prices "would come down within a matter of days" if President Bush told oil companies that he was going to support a windfall profits tax.
"But the president will not call the oil companies into his office because he's been too closely allied with those oil companies, and if he does it's going to be a window-dressing conversation," said Levin, who appeared with Specter on CNN's "Late Edition."
(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
