08-31-07 by dugan
None of us expects that this administration in Washington will change its stripes. That doesn’t make the Federal Trade Commission’s conclusion that oil companies are not gouging consumers on pump prices less galling. The Washington Post’s Steve Mufson has a sharp story today on the FTC’s report on 2006 gasoline prices, including the outraged comments of dissenting commissioner Jon Liebowitz.
The largely Bush-appointed FTC predictably says the 2006 price spikes in the spring were, yawn, just market forces at work. But what’s most telling is the FTC’s deliberate blindness to what happened in 2007. This year’s price spike was higher than 2006 even though oil prices were substantially lower in the whole first quarter and part of the second.
Ample oil was available and the only thing in short supply was refinery capacity. The outcome was another round of absolute or quarterly refinery profit records for oil companies in the second quarter.
Refinery capacity is not an act of God. Even breakdowns are largely a result of aged, poorly maintained equipment, as OilWatchdog’s report on manipulation of gasoline supply points out. Prolonged, simultaneous maintenance outages may or may not have been necessary.
The FTC refused to make any year-to-year comparisons between 2006 and 2007, even informally. As usual, oil companies get off the hook without so much as a warning that they’re being watched.