FTC gas-gouging investigators may have breathed too many fumes

The New York Times reports that the "F.T.C. [Federal Trade Commission] Finds No Gas Price Gouging After Katrina" today. Hmm. Maybe the FTC needs to hire me. I can show them one fact that makes the case a slam-dunk. The profit margin for refineries was a lot more after Katrina than before. Sure, the price of crude went up, but if the oil companies only increased their prices to cover that, gas prices at the pump would have been a lot lower.

"When the average price of a gallon of regular gasoline peaked at $3.07 recently, it was partly because the nation's refineries were getting an estimated 99 cents on each gallon sold," reports Justin Blum, of The Washington Post. "That was more than three times the amount they earned a year ago when regular unleaded was selling for $1.87. And the companies that pump oil from the ground swept in an additional 47 cents on each gallon, a 46 percent jump over the same period."

Mr. Blum went on to say that "Interviews with analysts, consumer advocates and participants in the oil markets indicate that typical market forces were at work in the price run-up." Well, of course that would be their position. However, methinks the FTC is too quick to take it as gospel. The fact is – as Exxon’s super-duper record profits after Katrina shows, money was being made hand-over-fist as the oil industry rushed to make the most of the situation.

I’m all for reducing gasoline usage, and that may be a nice side-benefit of these inflated prices. But I hate to see the already-fat oil companies get fatter as they take advantage of the country’s misfortune. They should be forced to pay back anything they took over their usual too-high profit margins, and the government should use that to supplement alternative energy research. And while they’re at it, putting a few gluttonous oil honchos in jail wouldn’t be a bad idea.