President Joe Biden on Wednesday called for a Federal Trade Commission investigation into potential “illegal conduct” by oil and gas companies amid skyrocketing gasoline prices, The New York Times reports.
Biden sent a letter to FTC Chairwoman Lina Khan raising concerns about the “mounting evidence of anti-consumer behavior by oil and gas companies.”
Gas prices at the pump are inexplicably high even as oil and gas companies' costs are falling, he wrote, calling for an immediate investigation into “whether illegal conduct is costing families at the pump.”
“Usually, prices at the pump correspond to movements in the price of unfinished gasoline, which is the main ingredient in the gas people buy at the gas station,” the letter said. “But in the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period.”
Amid rising prices, Biden said, the two largest oil and gas companies in the country are on track to nearly double their net income from 2019 and have announced plans for billions of stock buybacks and dividends.
Immediate action unlikely:
The letter is unlikely to spur immediate action by the FTC, which can break up large companies but does not have much power to affect gasoline prices in the near future.
The letter could spark an investigation that could be used in future enforcement actions, however.
“The F.T.C. is concerned about this issue, and we are looking into it,” Lindsay Kryzak, a spokeswoman for the commission, said in a statement.
Biden previously asked the FTC to monitor the gas market for potentially illegal conduct. The FTC in response ramped up scrutiny of gas company mergers.
Gas prices soar:
The average price for a gallon of gas in the United States hit nearly $3.40 this week, the highest price at the pump in seven years.
The White House estimates that if the cost to consumers were in line with costs to companies, drivers would pay up to 25 less per gallon.
The rising prices have been driven by OPEC (Organization of the Petroleum Exporting Countries), the global oil cartel that has throttled oil production even as commuters and travelers return after the peak of the pandemic.