Tuesday, May 15, 2007
Household Spending On Gasoline Up 85 Percent Over Five Years Ago;
Oil Industry Banks Record Profits
(Washington, D.C.) – Households are spending about $1,000 more per year for gasoline than they were just five years ago, an 85 percent increase according to consumer groups’ analysis in testimony prepared for the House Judiciary Committee.
Between January and May 2007, gasoline prices have increased 80 cents—60 cents going toward increased refining and marketing prices, according to Consumer Federation of America and Consumers Union. According to the testimony, the lack of investment in refining capacity and other market failures have resulted in record prices for consumers and profits for the oil industry.
“In the past five years the oil industry has picked consumers pockets for 200 billion in excess profits,” says Mark Cooper, Director of Research for Consumer Federation of America. “Today’s high gasoline prices highlight fundamental problems in the industry – a lack of competition that enables oil companies to exploit a tight market,” added Cooper. “It is time for Congress and the Administration to do their part to help alleviate the pain consumers are feeling at the pump.”
For years, the consumer groups have called on Congress and the Administration to provide greater oversight over oil industry market practices, as well as creating strategic refinery and product reserves, and policies that promote reducing the nation’s oil consumption.
CFA and Consumers Union recommend Congress and the Administration take immediate steps to help alleviate future spikes in gas prices. The recommendations include:
*Setting aggressive, concrete targets for reducing America’s oil consumption, including increasing miles per gallon standards for vehicles, (CAFÉ standards).
· *A strategic refinery reserve and a strategic product reserve that are dedicated to ensuring we have excess capacity sufficient to discipline pricing abuse.
*Mechanisms that prevent pricing abuse in the energy markets including formation of a joint task force of federal and state Attorneys General to monitor the structure, conduct and performance of gasoline markets, with an emphasis on unilateral actions that raise prices.
*A national policy that promotes the research, production and use of biofuels.
*Effective oversight by federal anti-trust authorities to monitor unilateral actions that result in oil price increases.
“An anti-competitive market and mismanagement are bilking consumers, while filling oil industry coffers,” added Cooper. “It is time for Congress and the Administration to address abusive oil industry practices.”
Contact: Mark Cooper, CFA, 301-807-1623; Jen Fuson, CU, 202-462-6262, firstname.lastname@example.org