High summer gas prices under suspicion

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Saturday October 7, 6:17 pm Eastern Time

High summer gas prices under suspicion-Chicago Tribune CHICAGO, Oct 7 (Reuters) - Letters from Midwest oil companies sent to the Environmental Protection Agency last May have cast suspicion on later claims by the companies that a shortage of ultra-clean gasoline caused summer price hikes, a Chicago Tribune Sunday edition investigation suggested.

Of the eight large oil companies that supply the Chicago and Milwaukee areas, four reported adequate or increasing supplies of reformulated ``RFG'' fuel and at least two other companies said their supplies were ample at the time, the Tribune said after examining the letters.

But prices at Midwest pumps skyrocketed even before the June 1 EPA rules for ultra-clean fuel kicked in, and gasoline costs rose uniformly to more than $2 per gallon one month after the letters citing adequate supply were received by the EPA.

Reformulated gasoline, or RFG, is a new summer fuel that was mandated for use beginning June 1 in Chicago and 10 other high-pollution metropolitan areas by the federal Clean Air Act.

The letters were drafted by oil companies to protest requests from Illinois and Wisconsin state lawmakers and gasoline marketers for relief from the costly RFG mandate. By the time the requests were filed, oil companies had trucked millions of gallons of RFG into the region.

Executives from Phillips (NYSE:P - news), Koch Petroleum, Exxon Mobil Refining and Supply Co., and Premcor Inc. all suggested their companies held levels of RFG that were ``manageable'' or better, the Tribune said.

BP (quote from Yahoo! UK & Ireland: BP.L) officials said the company verbally told the EPA its RFG supplies were adequate, while Citgo told the Tribune its RFG production was as expected.

Officials from the oil companies were not available for comment on Saturday.

The EPA eventually turned down the states' requests for temporary RFG requirement waivers and held firm amid protests as gasoline prices climbed.

However, the drastic and widespread rise in gasoline prices caused the EPA and the Department of Energy to request that the Federal Trade Commission search for evidence of collusion or price-fixing between the oil companies.

http://biz.yahoo.com/rf/001007/n07614358.html

-- Martin Thompson (mthom1927@aol.com), October 07, 2000

Answers

Well well, now its price fixing and collusion. Cacophonous tune of the 1970's vented by dunderheads.

-- David Williams (DAVIDWILL@prodigy.net), October 08, 2000.

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