May 12, 2002	Sunday	Safar 28, 1423

NEW YORK, May 11: Is “Big Oil” holding American car owners and businesses over a barrel by boosting gasoline prices every spring and summer for peak driving season?

The sudden price increases have become an annual event that consumer groups blame on the industry and companies blame on environmental laws mandating expensive fuels — but this time, federal regulators say they’re taking sharp aim at the problem.

The Federal Trade Commission said Wednesday it had begun collecting gasoline prices from tens of thousands of U.S. service stations to detect quickly any price spikes and investigate the reasons for them.

The probe was prompted by pressure from politicians, consumers and environmentalists who believe a spate of mergers helped companies muscle out independent refineries and manipulate prices before peak weeks of consumption.

When you don’t have competitive markets you are going to have high prices, said Tyson Slocum, energy research director with consumer group Public Citizen, which believes anti-trust laws do not sufficiently protect gasoline buyers.

Nobody doubts that prices at the pump have jumped wildly across the $1-$2 a gallon range in the last three years. The debate is over what causes the price surges.

The oil industry says they have been caused by closure of refineries that convert crude into gasoline. That’s happened as clean air laws have been introduced that require a plethora of gasoline blends that can be used in some states but not in others, creating spot shortages.

Mergers, the critics say, have contributed to what has become almost a rite of spring in the United States of low pump prices rapidly disappearing in the rear-view mirror. With less competition, prices are rising, they say.

Logically, the fewer players there are, the more economic ability they have to manipulate the market as we are seeing with Enron completely manipulating the power market in California, said Frank O’Donnell, spokesman for the Clean Air Trust environmental group.

Bankrupt electricity trader Enron Corp. is being investigated for exploiting the California market during the state’s 2000-2001 power crisis. Company memos released this week laid out complex trading strategies with names like Death Star and “Fat Boy” to exploit the electricity grid and boost profits.

The American Automobile Association, with millions of driver members, said there was “outrage” over price hikes because they upset financial plans of people on fixed incomes, students, the working poor and families.

Our concern is not that gasoline prices be as low as possible, our concern is that gasoline prices be as stable as possible, said AAA national spokesman Geoffrey Sundstrom.

Gas prices have jumped this year, with California and the Great Lakes states of the Midwest feeling the most impact, despite the fact that oil companies reported worse first-quarter refining profits than a year ago, partly on lower demand.

Legislators in Hawaii, which has the highest retail gas prices, last week approved imposing price controls, making it the first state to attempt to cap gas prices.—Reuters