A senator from New York wants the Federal Trade Commission to launch an investigation into U.S. oil refineries he believes may be responsible for high gas prices nationwide and here in the North Country.
Democrat Charles Schumer says new reports suggest that refineries are cutting back on gasoline stockpiles, resulting in a decreased supply and inflated prices at the pump.
Gasoline prices have dropped some in recent days, but the cost per gallon across most of the North Country is still above $4.
According to data compiled by the Energy Information Administration, refiners are operating at about 80 percent of total capacity. Schumer says that translates to a decrease of 900,000 barrels per day compared to 2010 output levels.
Additionally, Schumer says refiners have seen profits double since last year. He says gas prices skyrocket when crude oil prices rise, but the price at the pump comes down slowly even when oil prices decline.
"When the price of oil goes up, gas shoots up like a rocket - but when it goes down, the price of gas seems to fall like a feather," Schumer said. "That's just not right."
Schumer says the notion that refiners may be manipulating the market to keep gas prices artificially high is "offensive," especially as North Country families continue to struggle financially.
In a letter sent to the Federal Trade Commission this week, Schumer says there are "clear signs" that refiners may be stockpiling oil. So the senator wants an immediate investigation to ensure that North Country residents and customers statewide aren't being "victimized by this type of manipulation."
Schumer notes that U.S. refineries register profits based on the margin between what they pay for crude oil and what they get in return for wholesale gasoline and other products.
He adds that those margins have gradually increased throughout 2011 and are currently more than double what they were at this time last year.
Further, Schumer says the U.S. is exporting about 400,000 barrels of gasoline per day - that represents about 5 percent of domestic demand. He says gasoline exports are at the highest levels since the federal government began collecting such information in the 1940s.