Gas Gouging Appears Obvious, But Is It Illegal?


Attorneys general in at least nine states, responding to outrage by their residents, are investigating whether gas prices are a result of wrongdoing by the petroleum industry. In Washington, the attorney general’s office said crude oil prices have risen 14% in 2006, but the difference between what oil companies pay for crude oil and prices at the pump has soared 130%. An Arizona report says, “Profit margins realized by every segment of the oil industry were two or three times their normal margins.”

But USA Today reports that it is hard for authorities to prove consumers are being ripped off. For example, Arizona’s comprehensive investigation into that state’s high fuel prices after Hurricane Katrina concludes that while there was “profiteering” at all levels of the oil industry, nothing illegal took place. And Washington’s attorney general’s office said its more recent investigation of gas prices has found no evidence of illegal activity among gas retailers or producers. Gasoline is made from crude oil, which accounts for roughly 55% of the price for gasoline, the U.S. government says. But prices at the pump are based on supply and demand.


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