[Congressional Record Volume 149, Number 34 (Tuesday, March 4, 2003)]
[Senate]
[Page S3049]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STANDING UP FOR THE CONSUMER
Mr. WYDEN. Mr. President, gasoline prices are soaring through the
stratosphere, and the Federal Trade Commission, which is supposed to be
standing up for the consumer, ought to stop playing footsie with the
oil companies and take steps to protect the American people. I have
been trying to get the Federal Trade Commission to do its job now for
several years. In fact, I have supplied them with detailed reports
outlining anticompetitive practices in the oil industry in hopes that I
could get their attention. Unfortunately, they are still sitting on the
sidelines.
This morning I will outline what some of those anticompetitive
practices are that the oil companies are now using to victimize the
American consumer.
The oil companies are redlining. What they have sought to do is keep
independent wholesalers known as ``jobbers'' from competing in markets
by refusing to let independent dealers buy better priced gasoline from
the local jobbers. This is a technique to wall off whole communities
from competition. Redlining is going on today.
The oil companies are also zone pricing. They charge different prices
for the same gas at their own branded stores in adjacent neighborhoods,
pricing it as high as the market will bear. They have also charged
independent dealers higher wholesale prices than they charge the
company stores. The end result, the independents cannot compete.
So what we have in communities across the country is two stations
that are located next to each other, and because of a Supreme Court
decision, oil companies are required to treat those companies similarly
situated in the same way. But what the oil companies do very cleverly
is divide that community into different zones. Then they can stick it
to one of the stations. That station goes out of business. There is a
local monopoly and the consumer gets hosed once again.
A third area I have outlined for the Federal Trade Commission is that
the oil companies keep the market to themselves. In the past, they have
kept down refineries that could have increased supply and introduced
new competition. We have given this information to the Federal Trade
Commission and, again, they sit on their hands.
Finally, of particular importance to west coast consumers, where up
and down the west coast of the United States prices have soared, people
are paying $2 a gallon and close to it in many communities. What we
have seen in the past is the oil companies have exported gasoline to
Asia at a discount and then more than made up for it by sticking
consumers with higher prices in the tight west coast market.
The oil companies today would say they are no longer doing this, but
the fact of the matter is that oil company representatives told my
Oregon colleague, Senator Smith, who has worked with me so
cooperatively on many of these issues, in an open hearing in the
Commerce Committee that they would export to Asia once again whenever
it was in their commercial interest. So hypothetically, if they were
allowed to drill for oil in the national wildlife refuge in Alaska,
apart from the environmental considerations, based on the testimony in
the Senate Commerce Committee, the oil companies would be taking that
oil from the wildlife refuge, selling it to Asia at a discount and
sticking it to people in Oregon, Washington, and California.
It seems to me the Federal Trade Commission ought to be taking steps
to stand up for the consumer. If they do not think they have the
authority to stand up for the consumer at this point, they ought to
come to the Senate and tell us what authority they actually need in
order to protect the consumer and the gas-buying public. The
unfortunate response from the Federal Trade Commission has been to
simply sit this issue out.
For example, on July 17, 2002, in a hearing before the Senate
Commerce Committee, I outlined once again for the Federal Trade
Commission these anticompetitive practices. I went through with them
the impact of redlining, of zone pricing, of the pressure that has been
put on independent gasoline stations. I asked them to furnish for the
record any set of concrete steps they have actually taken to protect
the consumer.
We cannot find anything. We cannot find any specific action the
Federal Trade Commission took, either before July 17, 2002, when I
asked them that question, or since then. I am very troubled because I
think the problems we are seeing today, and they are long-term
problems, cry out for someone in the Federal Government to stand up for
the consumer. It is the job of the Federal Trade Commission to deal
with anticompetitive practices. These are long-term, anticompetitive
practices that are siphoning the competition out of the gasoline
markets in the United States.
I hope the Federal Trade Commission will either do its job under
existing law--I think they have the authority to deal with these
anticompetitive practices--or if they do not believe they do have the
authority they need to protect the consumer, they should come to the
Senate and outline what powers they need in order to stand up for the
American people.
Essentially, both of the reports that I did and have submitted to the
Federal Trade Commission found the very same thing. They found that the
oil companies were engaging in anticompetitive practices. I hope now,
given the enormous impact these huge gasoline price spikes are having
on consumers, the ramifications for business--we had scores of
businesses and business associations contact us in the past--that we
can get the Federal Trade Commission off the side lines. They have a
job to do. They are not doing it with respect to protecting the
American people from anticompetitive practices in the gasoline
businesses.
I intend to keep coming to the floor and the Senate Commerce
Committee until the Federal Trade Commission is prepared to do its job.
I yield the floor.
The PRESIDING OFFICER (Mr. Enzi). The Senator from Michigan.
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