API: FTC Finds “No Instances Of Illegal Market Manipulation”

WASHINGTON, May 22, 2006 – The American Petroleum Institute today issued the following statement regarding a Federal Trade Commission’s report that found “no instances of illegal market manipulation” to influence gasoline prices:

“According to the FTC, ‘the post-hurricane gasoline price increases at the national and regional levels were approximately what would be predicted by the standard supply-and-demand model of a market performing competitively. The conduct of firms in response to the supply shocks from the hurricanes was consistent with competition.’

“America’s oil and natural gas industry is broad and complex, and operates in extremely challenging environments including the hurricane-prone Gulf of Mexico.  The industry and its employees work hard to supply consumers with energy even during catastrophic events like last year’s hurricanes, which caused considerable damage to oil and natural gas installations.  Despite the strength of the storms, no significant releases occurred at exploration and production facilities in the Gulf.

“According to the FTC, ‘federal price gouging legislation, in addition to being difficult to enforce, could cause more problems for consumers than it solves.’ The FTC also noted that ‘if natural price signals are distorted by price controls, consumers ultimately might be worse off as gasoline shortages could result.’ ”

News media contact: Karen Matusic, (202) 682-8118