CBS-TV National Morning News
SUSAN McGINNIS, anchor: Well, right up there with immigration debate, the high price of oil. Right now the average Americans are paying nearly $3 a gallon for gas. In California it’s higher than that. And a new consumer report is blaming it on corporate markups. Sandra Hughes reports.
SANDRA HUGHES reporting: If you think gas prices are outrageously high now, imagine four or five dollars a gallon by this summer. That could happen in California, according to a newly-released consumer report. The study claims gas supplies have been kept intentionally low by oil companies looking for big profits.
Mr. JAMIE COURT (President, Foundation for Taxpayer & Consumer Rights): Oil
companies have, over a course of 10 years, steadily, each Memorial Day, decreased the amount of gasoline available in the system. And then when there’s a refinery fire or a pipeline break or some shock to the system, the prices for gasoline go through the roof.
HUGHES: The study, commissioned by the Foundation for Taxpayer & Consumer Rights, also found, while crude oil prices rose pennies per gallon this spring, prices for conventional gasoline on the spot market skyrocketed well above that.
(Graphic on screen)
January – April 2006
Average Crude Oil 13 Cents Price Increase Per Gallon
Average Spot Gas 32 Cents Price Increase Per Gallon
HUGHES: Oil company spokesperson Rayola Dougher refutes the claim that oil companies manipulate gas production.
Ms. RAYOLA DOUGHER (American Petroleum Institute): They try to produce all they can produce all the time.
HUGHES: And she says the Federal Trade Commission backs her up, Tuesday announcing to Congress that after months of investigation, it couldn’t prove collusion by the major oil companies.
Ms. DOUGHER: It’s the market at work. It’s supply and demand and nothing short of that.
HUGHES: Oil companies continue to blame the cost of ethanol and other additives for the price increases. But the study found that during this spring’s price surge, Washington state’s gasoline, which does not include ethanol, increased just as much as California’s, which is an ethanol blend.
(Graphic on screen)
January – April 2006
Washington State Gasoline: Increased $1.01 – No Ethanol Per Gallon
California Gasoline: Increased $1.04 – Ethanol Blend Per Gallon
Mr. COURT: Oil companies have consistently shorted the market. They have kept the system running on empty.
HUGHES: California’s attorney general is fed up with the high prices and plans on questioning big oil executives himself, under oath, beginning next month. Sandra Hughes, CBS News, Los Angeles.
