The Federal Trade Commission said it has found no evidence
of price manipulation by oil companies in the wake of Hurricane Katrina.
In its report, released on Tuesday, May 23, the FTC said it
did find 15 examples of pricing at the refining, wholesale or retail level that
do meet the definition of price-gouging as defined by the FTC’s appropriations
legislation for fiscal year 2006.
Of those 15, seven were refiners, two were wholesalers and six
That legislation defined price-gouging as any price in an
area designated as a national disaster area or in any other area where price
gouging complaints were filed because of Hurricane Katrina that “exceeded the
average price (of fuel) in that area for the month of August, 2005.”
However, the report also found that “other factors, such as
regional or local market trends” appeared to explain those prices in almost all
of the cases.
The report also restated the FTC’s position against federal
price gouging legislation, adding that it could cause more problems than it
solves and that competitive market forces should be allowed to drive prices at
The report concluded that there was no evidence to suggest
that refiners manipulated prices, nor have refinery expansion decisions over
the past 20 years been part of a coordinated effort to manipulate prices.
In addition, the report said that there was no evidence to
suggest that oil companies “reduced inventory to increase or manipulate prices
or exacerbate the effects of price spikes generally, or due to
hurricane-related disruptions in particular.”