FTC probe of high West Coast gas prices a welcome step
A probe of operators of West Coast oil refineries is a welcome step in making sure gasoline prices are not being manipulated to the disadvantage of consumers.
Seattle Times Editorial
THE Federal Trade Commission should investigate the operators of West Coast oil refineries, another welcome step in making sure gasoline prices are not being manipulated to the disadvantage of consumers.
U.S. Sen. Maria Cantwell's call for the FTC investigation puts further pressure on the oil refiners to explain why, as the rest of the nation is paying less and less for gas, West Coast drivers have been paying more and more. As of Friday, Washington state's average price was $4.21 a gallon and Seattle metro area's average was $4.27, according to the AAA.
Last month, Gov. Chris Gregoire sent letters to the oil refineries in Washington state asking them to take measures to increase production and supplies. She also directed the state Department of Commerce to monitor prices for petroleum products and recommend what the state can do, if anything, to reduce gas prices.
The refinery operators blame the high prices here on a fire that closed BP's Cherry Point operations for three months and on maintenance at California plants.
That may be, but a report by McCullough Research, an energy analyst, says that if gas prices had followed supply costs, the price at the pump would have been $3.51 a gallon (not more than $4.20). The Portland company says the difference might represent a windfall profit of $48 million a day for the oil companies.
The refiners say the maintenance is routine, scheduled and necessary for the plants to operate efficiently and safely, which is how they should be run.
But the FTC should honor Cantwell's request and find out why so many refiners slowed production when the Cherry Point refinery was offline. The commission should also weigh in on whether the West Coast refineries are too few in number with too much pricing power and temptation to manipulate the market.
This editorial originally said the estimate of oil companies' profit would be $48 million, rather than $48 million a day.