Justice department to Investigate Gas Prices

05/02/96

In response to calls from Congress, the U.S. Justice Department has announced that it will investigate whether the oil industry has illegally colluded to keep prices artificially high. The announcement comes on the heels of President Clinton's effort to reduce gasoline prices by ordering the the Energy Department to sell 12 million barrels of crude oil from the nation's strategic petroleum reserve. The president also directed Department of Energy chief Hazel O'Leary to make a report about why gas prices are currently so high.

The Justice Department announced that its anti-trust division had assembled a task force of five lawyers and economists to determine whether the rise in prices can be attributed to market forces. If the task force decides that the price rise was not market related, it will begin looking for evidence of illegal collusion.

The American Petroleum Institute, an oil industry trade group, has denied that oil companies were to blame for higher prices. The institute says the rise is due to a rise in crude oil prices, which peaked at $25 per barrel two weeks ago. The institute also pointed out that none of the investigations into alleged industry price gouging over the last 25 years have supported the charge.

Paul Dever -- The Auto Channel