The Justice Department has ordered a large number of U.S. oil companies to supply information on their petroleum products marketing and pricing practices.
Justice's antitrust division is conducting an inquiry into whether companies conspired to raise gasoline prices since Iraq's Aug. 2 blitz of Kuwait.
It sent civil investigative demands to the companies, which are similar to subpoenas and require the submission of documents or written statements.
The chief of the antitrust division, Asst. Atty. Gen. James Rill, said his division has been gathering data on gasoline prices and supplies since Aug. 6.
He said, "That phase of the investigation developed substantial information about the nature of crude oil and gasoline markets and how they behaved in the wake of the Aug. 2 invasion. It also provided us with an opportunity to have the parties explain the factors that caused them to raise gasoline prices.
"With the civil investigative demands, we will be able to examine more closely those explanations and pursue some issues for which we don't have answers."
The antitrust division also will continue to interview industry officials and collect price and supply data from public and government sources.
"We aggressively will pursue this investigation until we determine whether or not violations of antitrust law contributed to the rise in gasoline prices," Rill said.
The Federal Trade Commission (FTC), Department of Energy, and various state attorneys general are cooperating with the investigation.
Meanwhile, the Petroleum Marketers Association of America filed a complaint with FTC, asking for hearings on the price and allocation practices of some refiners in the wake of the Middle East oil supply disruption.
PMAA cited marketers' complaints that refiners have passed on significant price increases to independent marketers while holding their operated outlet and dealer tankwagon prices at artificially low prices.
PMAA said, "The result of these pricing strategies on the part of refiners will be to force wholesale distributor competitors out of business and allow refiners unfairly to build market share to the long term detriment of the consumer."
PUMP PRICES
The American Petroleum Institute said the average pump price of gasoline at the end of August was nearly 11cts less than the 1981 price, even without an adjustment for inflation.
API said the average retail price of gasoline at the end of August, as reported by the Bureau of Labor Statistics, was $1.246/gal vs. $1.353 in 1981, the year all price controls were removed from gasoline.
If inflation and higher taxes are taken into account, the price disparity is even more striking. With adjustments made for inflation and tax increases, the average pump price of gasoline 9 years ago was $2.02/gal, 77cts above the August level.
API noted that the recent sharp increase in gasoline prices was more than matched by the decline in prices that occurred between February and March of 1986, a decline that exceeded the recent increase by 6cts/gal.
Examining gasoline in relation to other products, the price of gasoline has risen slightly less than the average for all items in the Labor Department's consumer price index.
Using 1967 as the base year, the CPI for gasoline stood at 390.3 in August, compared with 394.1 for all items in the index. Indices for some other items included used cars 395, cereal 512.5, cola drinks 350.2, prescription drugs 392.4, hospital rooms 1,097.4, residential rent 330, and newspapers 403.
API's study also found that gasoline mileage has increased yearly, rising from 13.52 mpg in 1970 to 19-95 mpg today, reducing the cost of gasoline per mile traveled from a high of 12.6cts in 1980 to 6.2cts last August.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.