Report suggests high gas prices were market manipulation
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SEATTLE -- As gas went well over $4.00 a gallon in Washington and nearly $5.00 in other parts of the West Coast this past year, an oil shortage was blamed for the spike.
But now a new report questioning that shortage has Sen. Maria Cantwell pushing the Department of Justice to get involved.
"I want the Department of Justice and the Federal Trade Commission to investigate refinery by refinery whether these reports are true or not," Cantwell said.
In their report, Oregon-based McCullough Research claims in May and October, several refineries said they had to shut down gasoline production because of fire, like the one at Cherry Point in Anacortes, or for maintenance reasons when actually those refineries weren't shut down at all.
And citing thousands of environmental documents, McCullough accuses those same refineries of creating an imaginary shortage and driving up prices by 50-cents a gallon.
If the report is true, it meant drivers on the West Coast were paying more for a gallon of gas than anywhere else in the country and more than we should have been -- and the oil companies pocketed the profits.
Tupper Hull with the Western States Petroleum Association -- a spokesperson for all west coast refineries -- says some refineries did shut down, but still produced emissions levels that may have looked like they were up and running.
He blames the spike in gas prices on real supply and demand.
"There was no subterfuge or misconduct on the part of the refineries," Hull said.
But Cantwell countered it wasn't just supply and demand.
"Supply is up, prices are up - what's going on?" she wondered.
Cantwell says any refinery found guilty of manipulating gas prices could be fined $1 million for every day they spiked. But, she first has to convince federal agents to investigate.
She says fellow senators from Oregon and California are also putting the pressure on.
A 50-cent spike in prices would have mean on average, drivers would have paid an extra $20 a month.
But now a new report questioning that shortage has Sen. Maria Cantwell pushing the Department of Justice to get involved.
"I want the Department of Justice and the Federal Trade Commission to investigate refinery by refinery whether these reports are true or not," Cantwell said.
In their report, Oregon-based McCullough Research claims in May and October, several refineries said they had to shut down gasoline production because of fire, like the one at Cherry Point in Anacortes, or for maintenance reasons when actually those refineries weren't shut down at all.
And citing thousands of environmental documents, McCullough accuses those same refineries of creating an imaginary shortage and driving up prices by 50-cents a gallon.
If the report is true, it meant drivers on the West Coast were paying more for a gallon of gas than anywhere else in the country and more than we should have been -- and the oil companies pocketed the profits.
Tupper Hull with the Western States Petroleum Association -- a spokesperson for all west coast refineries -- says some refineries did shut down, but still produced emissions levels that may have looked like they were up and running.
He blames the spike in gas prices on real supply and demand.
"There was no subterfuge or misconduct on the part of the refineries," Hull said.
But Cantwell countered it wasn't just supply and demand.
"Supply is up, prices are up - what's going on?" she wondered.
Cantwell says any refinery found guilty of manipulating gas prices could be fined $1 million for every day they spiked. But, she first has to convince federal agents to investigate.
She says fellow senators from Oregon and California are also putting the pressure on.
A 50-cent spike in prices would have mean on average, drivers would have paid an extra $20 a month.
This is why the US needs to stop allowing oil to be traded as a commodity! It's the height of insanity! There is a single, solid definite cost to drilling, refining and distributing oil. It doesn't change magically because Iran gets into the news!If bread and milk changed their price every day based on dairy farmers threatening each other there would be outrage. The US government needs to ban oil from being traded on the stock exchanges. Â
Oh well can't beat their dividends and their solid stock price...
Oil companies manipulating the gasoline market to reap ever higher profits and line their pockets of greed at our expense. Imagine that. Sounds very Republican of them.
Instead of fining the companies, force them to drop the prices at the pumps by the same amount for a few months. At least then the consumer who overpaid will get their money back in lower gas prices rather than it disappearing into a government fund.
I'm shocked. And by "shocked", I mean "not shocked at all". I'm pretty much sure every one knew this was happening. Â Â
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I took a two week road trip through 11 western states late September - early October. I was paying between $2.19 and $2.79 a gallon through Montana, Wyoming, Utah, Colorado, New Mexico, Nevada, Arizona,... Then as soon as we got within a few miles of the California border it shot up to just over $4, and as soon as we crossed into the state it was about $4.75. It remained high like that all the way up the coast. Ridiculous.Â
We all pretty much knew this at the time of the rising prices. Are we to feel better now that it is printed word? Not.
 Fine 'em, and they'll just pass it on to the pump..  No win..
Anyone remember Enron and Grandma Millie? Anything some familiar here?
Ya think ??? But nobody will do anything about it and the public will take it in the shorts again. What's new ??
And the sky is blue..........
and this surprises people because...
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 @John E. Wraughton Normally, I would agree... but in the case of  quasi-monopolies, like big oil, there is no market pressure to reduce price manipulation.  How else do we keep ourselves from becoming victims of pure greed if not through government oversight and regulation?
DUH!!!!!
fined a million dollars a day but probably made tens of millions a day,I don't see a down side for the oil companies to artifically jack up the prices
By now, this really sounds like old news.
People, calm down. My Oil Stocks are skyrocketing. Please move on to the next story.
 @DrAmerika "Please move on to the next story."
That would be the move to tax dividends at 35%...
So if the oil companies are investigated and found to have manipulated gas prices, on top of the fines they receive from the government, would consumers be able to successfully sue for price gouging? If so, I say we all band together and try to get some of our money back!
 @Tattooed_Angel It would be a massive class action suit...
 @OrcasThunder  @Tattooed_Angel i want to be the attorney on that one
I hope the refineries get investigated and I hope they get royally screwed with no lube... just like they've been doing to us.
@Tattooed_Angel and then raise gas prices to cover the lawsuit fines... we're effed no matter how ya slice it.
Oil Companies just plain suck.
OOORHAAA!!! The Sarge is back! Still paying $4.29 for diesle in Montesano while supreme is $3.75. WT.????
Remeber when diesel was the low price at the pump? I remember when a truck driver could actually make a little money because the fuel was not the big ticket item.
If people in this country would stop driving like idiots they wouldn't burn as much fuel, demand would go down and so would the price. But no, so many morons drive their 4 wheel drive trucks, suburbans, etc. at 80 down the freeway and don't care at all how much fuel they use. Bet most of them don't even need 4 wheel drive or a pickup. All image. What a country.
 @Powderhound I don't doubt there are a lot of people out there who drive big pickups just because they can, but personally everyone I know who owns a truck actually hauls stuff with it from time to time. They are useful vehicles.
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Now, substitute "SUV" for "4 wheel drive truck" and I'll agree wholeheartedly. Most SUVs are more expensive to buy in the first place than your average sedan, less than half of SUV drivers actually are the stereotypical "soccer moms" that actually need such huge vehicles, and they use far more gas than they need to.
 @KieferSkunk  @Powderhound I love my Cayenne and will keep driving it unless gas is at 8 dollars a gallon :)
And furthermore, keeping supply of a finite and eventually exhaustible resource away from consumers means more cake is available tomorrow and the eventual higher prices when total supply is down are a little bit lower.
Maria "CantDoAnythingWell" always rants that she is going to investigate, but its always the last word about it that you hear. She is just trying to justify that she has been elected once again to make everyone think she is earning her dollars,,,NOT. It wont go any where.
Maria, when refineries are down, supply is *not* up. Gasoline != crude oil. We had a chance to elect a senator with an actual degree in economics and we blew it. And instead we get more derp. It's almost sad how hard she tries to sound like she knows what she's talking about.
@Pahana Sounds like your the one who is trying to sound like you know what you are talking about. As the article states, the refinery spokesman admitted that the refineries who claimed to have shut down were in fact still producing emission levels which made them look like they were up and running. Now I wonder why that is, hmmm? Why would emission levels be so high for a refinery that was supposed to be shut down? Could it be that they weren't really shut down at all? *gasp*
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And whether you like it or not, Cantwell IS right. Domestic production and supply IS up in the United States. You can thank the oil boom in North Dakota and Montana for that.
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Oil companies have been cheating us since Bush in the office before.......now
they are telling us !?
 @scychan Oh, they've been cheating the market far longer than that.
Thank you Maria!Â
Market manipulation? Who would have ever thought (like really). That has been going on for more years that I can count and the same thing has been done each time they are caught. NOTHING, not a damn thing and they keep doing it time and time again. We need a government that is not paid by BIG OIL that will clamp down on them, break up the monopoly where they pump it out of the ground, refine it in their refineries, truck it in their own trucks and sell it in company owned stations. If that isn't a monopoly then what is? I was in the automotive business for 45 years and in service stations (that was when you got service) and watched how big oil played their games and they are still playing games with your wallet. Â
ya think? Â time to torpedo oil company subsidies.... Â greedy bassurds....
Yay, Maria! Â You go girl. Â I've been saying this exact thing for years.
Thanks for looking into this Maria. You turn your words into actions, I'll be happy you're in office
Hey its just capitalism at work. They can charge whatever the traffic will bare. There's nothing illegal about that. Don't waste tax payers money on an investigation that the oil companies will just pay someone off to bury it anyways. A lot of it comes from the individual gas station owners anyways. When I use to deliver fuel to gas stations it was all the same cost, the stations just put whatever price they want on to it. They like to tell you they only mark it up a nickel a gallon, and some do, but a lot mark it up a lot more than that during times of stress on the market.
If it was all the same price, then they were definitely price fixing. Different companies have different overhead, and their prices should reflect that. Beyond that, it makes more sense for a station to sell gas CHEAPER then the one across the street to get the volume. Gas dispensary is a volume business. The more gas you sell the more people come into the store to buy the candy and soda, which is marked up way more then the gas. Gas doesn't make them money, the other items do.
 @Jalharad But if the oil company across the street is either owned by or in cahouts with my station, and they agree to price fix... and worse, there are no other competitors in the area, then doesn't the pressure from competition go away?  And without the pressure from competition, can't they charge whatever they want?  Does the "whatever the market will bear" price turn into "until it breaks the backs of every business in the country"?
All talk so far. Let see some actions.
Of course it was. Keep the Marxist dolt in office. Some under the table garbage is going on.
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Anyone who thinks Obama is not a big biz brown nose needs to wake up. He has his deals made.
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He is pretending to close oil shale and natural gas production until he lets it go. It will explode, make him look good and all will have to pay a fee to get in on it.Â
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This is all about him, you mean nothing except to suffer and make him look like some deity.
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Oh, Cantwell. Superlative equivalent to total idiot outside of Murray. Whatever.
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We have enough oil shale to bury the middle east overnight. Do some research. Stop blaming big oil. That is a diversion from the actual fact. They make money from demand and actual "profit" is about four cents per gallon.
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 @pbs7mm ok, the election is over, you lost. SHUT UP ALREADY.
@pbs7mm Ah yes. The 7mm brain size dolt posts even again.
If it's not a "refinery malfunction" it would be a hurricane or political unrest Tahiti. Let's get the economy jump started and throttle back gas prices to 2.00 a gal!
 @raisinkain2 It will NEVER happen. We are no longer in the driver seat for the price of a gallon of gasoline. The international market calls the shots, and we're no longer the big dog on the block.
 @raisinkain2 Argh, sorry wasn't done - also - the weak US dollar means we buy less on the international market.
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Who's monetary policy was it to have a weak US dollar again?
 @Howard Beale  @raisinkain2 Who was in control and still is?