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What caused gas prices to spike { September 4 2003 } Original Source Link: (May no longer be active)    http://moneycentral.msn.com/content/CNBCTV/Articles/TVReports/P60034.asp http://moneycentral.msn.com/content/CNBCTV/Articles/TVReports/P60034.asp What caused gas prices to spike? Some say the answer is simple: More cars on the road and less supply because of the blackout. Others suggest consumers were gouged. 5:52 PM EST September 4, 2003 by Melissa Francis Did the blackout and the summer driving season really cause the recent run-up in gas prices -- or is something else at work? Energy Secretary Spencer Abraham says he's launching an investigation into possible price gouging at the nation's gas pumps. Abraham announced Thursday that he's putting the department's independent statistical arm in charge of the investigation. Meanwhile, consumer groups have vowed to keep up the pressure until the public gets answers. After all, drivers have never seen higher prices at the pump, and the extra pennies are adding up. Initial reports blamed the recent price spike on two problems. First, summer driving season pushed up demand. Second, the Aug. 14 blackout in the Northeast shut down some refineries. The antitrust issue But consumer advocates say recent mergers may have put the country's fuel resources into too few hands. "To protect consumers against price spikes Congress needs to give the FTC (Federal Trade Commission) greater powers to enforce antitrust behavior and to also look at whether or not we need greater margins or inventories to protect us against these price spikes," says Anna Aurilio of the U.S. Public Interest Research Group, an advocacy group. The blackout did only last just over a day. And summer driving season may have fallen short of expectations. "I think that people were looking for more demand throughout the season," says Eric Bolling, an independent oil trader. But others say Americans are reacting the same way they did to the blackout -- we all want someone to blame. A legitimate shortage "I think there was a legitimate shortage in the gasoline markets in the second half of August," says David Wheeler, an analyst at J.P. Morgan. "We lost eight refineries because of the blackout and four on the West Coast because of problems. That came at a time when we had peak demand, and we're starting to see prices come back down." The FTC looked into similar price spikes in 2000. The investigation didn't find anything illegal. But it did conclude that refineries are slow to catch up after problems. Refineries could find themselves behind again very soon. They more than likely will be trying to catch up to demand for heating oil this fall. "I think the jury is still out on whether that will happen, but it probably is not a bad idea for consumers to lock in their prices if they can," Wheeler says. Abraham hasn't set a timetable for the investigation. But he has promised to turn the data over the FTC and Congress when it's complete. If you have a comment or question about a show, you can call CNBC Viewer Services at 877-251-5685, or send an e-mail message directly to your favorite show from our Email CNBC page.

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