API: Unfounded Allegations Will Not Solve U.S. Energy Challenges

The American Petroleum Institute today issued the following statement regarding Senators Claire McCaskill and Charles Schumer's letter to the Federal Trade Commission review of refinery capacity and alleged concerns over market manipulation.

"This is an attempt to distract attention from failed energy policy," said John Felmy, API's Chief Economist. “The Federal Trade Commission was already closely monitoring gasoline prices, and no evidence has surfaced to suggest supply and demand aren’t the primary forces driving them.

"Refiners have been producing record amounts of gasoline, but world and U.S. demand for petroleum have been increasing. Crude oil prices are up, and local issues in the United States, such as the flooding along the Mississippi, are affecting gasoline markets. The high price of crude oil is the major cost component in gasoline pump prices, followed by federal, state and local gasoline taxes. Critics wonder why gasoline prices are as high today as in 2008 when crude oil prices were significantly higher, but in 2008 the recession weakened demand, and refiners lost money selling gasoline.

“Press releases that call for yet more investigations of prices insult consumers. We need to be producing more oil and producing more of it at home. Our companies are working hard to do that, but they need the government’s cooperation. Policymakers concerned about gasoline prices need to change their focus.”

API represents more than 470 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.