States Seek Aid on Gas Probe

Democratic attorneys general in eight states Thursday asked the Bush administration to join them in investigating whether big oil companies are illegally pushing up gasoline prices.

The request from the states, including California, comes amid growing pressure from Democrats in Congress and presidential challenger Sen. John F. Kerry for the White House to take action to ease record-high retail gasoline prices.

In a letter to President Bush, the group of chief law enforcement officers asked him to direct U.S. Atty. Gen. John Ashcroft “to join with us in investigating whether the oil and gas industries are colluding to drive up the cost of gasoline.”

The letter was signed by officials from California, New York, Connecticut, Arizona, Minnesota, Rhode Island, Iowa and Arkansas.

The national retail price for gasoline averaged $2.02 a gallon this week, although pump costs in many states are much higher.

“All of our consumers are adversely affected by high gasoline prices,” the officials said in their letter. “We intend to use the full measure of our antitrust and consumer fraud jurisdiction to investigate.”

The officials also asked for the State Department’s help in obtaining documents and information located overseas that are needed for the states’ gasoline price investigations.

Those documents and information primarily relate to foreign oil companies doing business in the U.S. and the foreign operations of U.S.-based firms.

White House spokesman Trent Duffy said he had not seen the letter, but “price gouging and law breaking [at the gasoline pump] will not be tolerated” by the administration.

The Federal Trade Commission and the Energy Department are monitoring the gasoline market and are “prepared to conduct inquiries where appropriate,” he said.

But Duffy could not say whether the president would call for a formal federal investigation at this time into any wrongdoing by oil companies.

Oil companies blame high prices on strong consumer demand, federal environmental regulations that require many gasoline blends, the difficulty in building refineries and high crude oil prices that account for about half of the cost of making gasoline.

The Federal Trade Commission has investigated the U.S. oil industry several times over the years but did not find companies worked together to raise gasoline prices.

“The fact that we haven’t found it doesn’t mean they haven’t cheated,” California Atty. Gen. Bill Lockyer said.

It is not illegal under U.S. law for a company to act on its own to restrict supplies or close a refinery, which may lead to higher pump prices.

Oil companies are also permitted to practice so-called zone pricing, in which they charge different gasoline prices in a specific location or city, which often results in a wide range of pump costs at service stations just blocks apart.