Environmental regulations and high crude oil prices cause fuel price hikes, not manipulation of supplies, claim industry executives who testified April 30 before a Senate panel.
According to published reports, executives from Shell Oil Co., ExxonMobil Corp and other companies said findings from an investigation by Senate Democrats charging manipulation to drive prices higher were incorrect. A report issued by Sen. Carl Levin (D-MI) said industry mergers and refinery closings gave companies leverage over retail prices. Levin said a one-penny increase in the price of fuel translates into $1 billion in additional annual profit.
Meanwhile, company officials said price changes are determined by crude oil prices, which depend on events in the Middle East. The Senate panel is investigating whether companies encouraged fuel price jumps in the Midwest and West Coast during 2000 and 2001.
So what should truckers expect from these hearings? Probably not much, said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association. Spencer said OPEC was created for the sole purpose of manipulating prices for crude oil. And U.S. oil companies are private, for-profit businesses that boost prices whenever demand outpaces supply, he added.
"The fact that they can completely control supply may be maddening and infuriating to truckers and others who must buy fuel, but it doesn't violate any current U.S. laws," Spencer said.
--Dick Larsen, senior editor