LaHood calls on Federal Trade Commission to review gas price spike

[SEPT. 2, 2005]  WASHINGTON -- On Wednesday, U.S. Rep. Ray LaHood, R-Peoria, called on the Federal Trade Commission to review the possibility of collusion or gouging with the most recent rise in gasoline prices in the wake of Hurricane Katrina. In a letter to the FTC, LaHood noted that gas prices in central Illinois rose 25 cents or more the same morning that Katrina made landfall along the Gulf of Mexico.

"I find it hard to believe that the same gas which cost about $2.50 per gallon at 7 a.m. on Monday was priced at over $2.75 by noon that very same day," said LaHood, "but I have been told by the FTC in the past there is no collusion or price gouging by the oil industry. That is why I have asked the FTC to take a hard look at this situation and get back to me quickly with answers.

"The reality is the people have a hard time believing gouging or collusion is not taking place when they see these spikes, and I have a hard time believing it myself," LaHood added. "I have received over 100 phones to my offices from citizens who are outraged over these prices, which is more calls than any recent issue. I am very worried about the impact these price increases will have on people's wallets, as well as the negative impact it can have on our overall economy."

In LaHood's letter to the FTC, he asks the agency to "review the recent price increases in my district to ensure that collusion is not occurring." This is the second request in recent years that LaHood has made to the FTC in an effort to investigate to gas prices. LaHood's earlier letter was sent in March of 2003.

A copy of yesterday's letter is at right.

August 31, 2005

The Honorable Deborah Platt Majoras, Chairman
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20508

Dear Chairman Majoras:

I am writing to express my concern about the recent increase in gasoline prices in Central Illinois. I realize that determining the retail price of gasoline is a complex issue that involves multiple variables, the most notable of which is the price of crude oil. In addition, I understand the uncertainty of the markets caused by the recent hurricane along the Gulf Coast, however, I am concerned about the overnight increase in the cost of gasoline at the pump. In particular, I am concerned that, in one instance, a gas station in Pekin, IL, raised prices by 25 cents per gallon overnight prior to the devastation caused by Hurricane Katrina.

It is my understanding that the FTC currently monitors the retail gasoline in order to prevent collusion of profiteering. Based on the recent events in my Congressional District, I hope, that if your staff is not currently doing so, you will review the recent price increases in my District to insure that collusion is not occurring. In addition, I would appreciate it if the Commission could provide my office with an update on both the wholesale and retail price of gasoline in Central Illinois. It is my hope that this information will help address public concern in regard to this issue.

Sincerely,

Ray LaHood
Member of Congress

[News release from Rep. Ray LaHood,
18th Congressional District]