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Schumer says oil firms gouge public

Sen. Charles E. Schumer took on the big oil companies Monday, blaming them for the high gasoline prices that have appeared at the pumps since Hurricane Katrina ravaged the Gulf Coast.

Standing in front of a Delta Sonic gas station on Walden Avenue in Cheektowaga, the New York Democrat released a survey showing local gas prices over the weekend ranging from a low of $2.89 a gallon to a high of $3.39 for regular. Delta Sonic, he noted, has among the lowest gas prices in Western New York. The station was charging $2.85 a gallon Monday.

But overall, Schumer said, it's the major oil companies and oil-producing countries that are gouging the public -- not the individual gas stations.

"The money is all going to oil companies and OPEC (Oil Producing Export Countries)," Schumer said.

"I don't blame the gas stations," he continued. "They are being jerked around by the oil companies."

Locally, Mobil is the predominant gas station retailer.

An Exxon Mobil spokesman denied Schumer's charge that gas companies are price gauging.

The company raised prices after the hurricane, but not to the extent that prices went up at the pumps, spokesman Russ Roberts said from the company's headquarters in Texas.

Roberts said prices went up following the hurricane in response to reduced supply and increased costs after some refineries were shut down and some pipe lines were not operational.

But when supply was restored, Roberts said, Mobil dropped its prices.

Roberts added that only 15 percent of Mobil gas stations are owned by Exxon Mobil. The other 85 percent are independently owned and operated, and set their own prices, he said.

"A lot of where the prices are set are by the dealers and distributors," he said.

But during a late morning press conference, Schumer focused on the gas companies. He said part of the problem is the deregulation of the industry that occurred during the 1990s, as well as mergers within the oil industry approved by the federal government, among them the merger of Exxon and Mobil.

"Why did we let Exxon and Mobil merge?" he asked, then listed other oil company mergers as well. "There are only four big oil companies in the whole world."
Schumer then called for the federal government to consider breaking up the big oil companies.

He also called on the Federal Trade Commission to investigate price gouging by looking at the oil companies, gas station owners and the pipeline. He called for a task force to criminally prosecute anyone found to be price gouging.

Schumer also called for:

The creation of an emergency authority at the FTC to investigate gasoline price gouging if the president of the United States declares an energy emergency.

A campaign encouraging consumers to report price gouging, including a new Web site and toll free numbers.

Increased funding to help low-income residents with heating bills for the winter.


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