Gas Prices: How Are They Really Set?

Publication

Gas Prices: How Are They Really Set?

Abstract

The Majority Staff of the Senate Committee on Governmental Affairs' Permanent Subcommittee on Investigations conducted an investigation into a 2001 hike in midwest gas prices, seeking to uncover the reason for this increase and others like it. The Subcommittee interviewed high profile representatives from the petroleum industry and analyzed data from the Energy Information Administration and gas price data from the Oil Price Information Service. The report found that these increases in gas prices are due to high concentration, or the focusing of the industry on several large companies, of the oil and petroleum industry, which tightens the supply, raises gas prices, and ultimately harms consumers.