Record Gasoline Prices: Gouging or Supply and Demand?

With gasoline prices at record levels, the debate has intensified over whether gasoline companies are gouging customers at the pump or simply responding to supply and demand.

“We don’t know if price gouging is occurring at the pumps as of right now," Rep. Heather Wilson, (NM-R)  said on "Morning Call. "The Federal Trade Commission has no authority to investigate price gouging."

She said, however, that the FTC should have the authority to investigate people “who are not playing on a free market scale.”

Charlie Drevna of the National Pretrochemicals and Refiners Assocation defended the industry, saying higher gasoline prices were due to a shortage of refineries rather than gouging.

When asked why refinery capacity is only at 89%, Drevna said, “We are squeezing every gallon of diesel out that we can.”

Wilson said she has proposed legislation to define price gouging and to create civil and criminal penalties, but Drevna said it would only make the problem worse.

“If ultimately enacted, it will cause real problems,” he said. “This type of legislation is unfortunately sending definitely incompatible messages to refiners.”