The Federal Trade Commission said Thursday that it would begin policing the petroleum industry with new penalties for anyone trying to manipulate energy prices.
The rule, which will go into effect in November, targets anyone dealing with crude oil, gasoline and petroleum distillates. It prohibits market distortions through false or misleading statements about stockpiles, prices or crude and fuel output.
As part of its new powers, the FTC will monitor reports from petroleum refiners on the amount of gas held in storage by refiners. Those figures, which are collected and published by the Department of Energy each week, can push prices up or down.
Analysts and traders depend on government inventory reports when buying crude and gasoline futures. The future price in turn helps set wholesale and retail gasoline prices.
"This new rule will allow us to crack down on fraud and manipulation that can drive up prices at the pump," FTC Chairman Jon Leibowitz said. "We will police the oil markets and if we find companies that are manipulating the markets, we will go after them."
Violators would face a civil penalty of as much as $1 million a day.
Congress broadened the FTC's powers to scrutinize petroleum companies when oil prices started rising in 2007, eventually driving retail gasoline above $4 a gallon last summer.
FTC Deputy Assistant Director Patricia Galvan said the commission hadn't policed the petroleum industry like this before. It's already illegal to lie on government petroleum inventory reports, but Galvan said the rule covers information the industry gives to both public and private sources.
John Felmy, the chief economist at the American Petroleum Institute, said the FTC rule could backfire, resulting in less information for the marketplace as refiners and other petroleum companies hold back on reporting anything not required by law.
"Firms don't want to do anything that could be interpreted later as a violation," he said.
Refiners currently volunteer information about petroleum supplies and wholesale gas prices to companies such as Platts, the energy information arm of McGraw-Hill Cos.
Felmy said he was unaware of any petroleum refiners reporting fraudulent market data. The FTC issued a report two years ago that found no evidence of price fixing during the summer of 2006.