Buccaneer
05-16-2007, 02:42 PM
WASHINGTON (Reuters) - Oil companies are not overcharging motorists for gasoline, an industry group told Congress on Wednesday.
Consumers are paying record gasoline prices, currently at a national average of $3.10 a gallon, because of tight supplies and strong motor fuel demand.
The American Petroleum Institute told lawmakers its members were not to blame for high pump costs.
"We recognize that consumers are frustrated with today's higher prices," API chief economist John Felmy told lawmakers on a House panel investigating the price run-ups.
"The contention that higher prices are driven by market failure or market manipulation, including the holding back of supplies, is not credible," Felmy said.
Many U.S. lawmakers and consumer groups are accusing oil companies of keeping some their refineries temporarily offline in order to limit gasoline supplies and push up pump prices.
About 800,000 barrels a day in U.S. oil refining capacity are currently shut, resulting in the loss of about 400,000 barrels a day in gasoline production, according to government energy experts. Normally less than 100,000 barrels a day in oil refining capacity is offline at this time of year.
Felmy acknowledged that many of the nation's aging refineries are temporarily down for planned routine maintenance or had unexpected operating problems that have prevented them from making gasoline.
In a telephone call with reporters before the hearing, Felmy said oil companies were not able to coordinate their refinery maintenance and outages to make sure enough facilities were always operating because that would violate federal antitrust laws.
"But I am sure that they are looking to, wherever they can, return to operations as quickly and safely as they can. I have no doubt that they will be doing that," he said.
Felmy said refinery problems were not the main reason fuel prices were rising anyway.
"The most important factor in higher gasoline prices has been higher crude oil prices," he said. "More than half the cost of gasoline is attributable to the cost of crude oil."
Felmy also said there are lower U.S. gasoline imports because some European refineries have shut for spring maintenance; there also has been a recent French port workers' strike that cut into available supplies.
Consumers are paying record gasoline prices, currently at a national average of $3.10 a gallon, because of tight supplies and strong motor fuel demand.
The American Petroleum Institute told lawmakers its members were not to blame for high pump costs.
"We recognize that consumers are frustrated with today's higher prices," API chief economist John Felmy told lawmakers on a House panel investigating the price run-ups.
"The contention that higher prices are driven by market failure or market manipulation, including the holding back of supplies, is not credible," Felmy said.
Many U.S. lawmakers and consumer groups are accusing oil companies of keeping some their refineries temporarily offline in order to limit gasoline supplies and push up pump prices.
About 800,000 barrels a day in U.S. oil refining capacity are currently shut, resulting in the loss of about 400,000 barrels a day in gasoline production, according to government energy experts. Normally less than 100,000 barrels a day in oil refining capacity is offline at this time of year.
Felmy acknowledged that many of the nation's aging refineries are temporarily down for planned routine maintenance or had unexpected operating problems that have prevented them from making gasoline.
In a telephone call with reporters before the hearing, Felmy said oil companies were not able to coordinate their refinery maintenance and outages to make sure enough facilities were always operating because that would violate federal antitrust laws.
"But I am sure that they are looking to, wherever they can, return to operations as quickly and safely as they can. I have no doubt that they will be doing that," he said.
Felmy said refinery problems were not the main reason fuel prices were rising anyway.
"The most important factor in higher gasoline prices has been higher crude oil prices," he said. "More than half the cost of gasoline is attributable to the cost of crude oil."
Felmy also said there are lower U.S. gasoline imports because some European refineries have shut for spring maintenance; there also has been a recent French port workers' strike that cut into available supplies.