The Federal Trade Commission has promised the White House the agency will be giving extra scrutiny to the oil and gas industry as the Biden administration attempts to ease Americans’ rising costs at the pump, specifically vowing to crack down on “illegal mergers.”
In an Aug. 25 letter obtained by FOX Business, FTC Chair Lina Khan told White House economic adviser Brian Deese that she would direct her staff to take a series of actions to increase policing of the industry, starting by identifying “additional legal theories to challenge retail fuel station mergers where dominant players are buying up family-run businesses.”
GAS PRICES DODGE HURRICANE IDA CATASTROPHE
Khan also vowed that the FTC would be taking “steps to deter unlawful mergers” in the industry, writing that over the past few decades “retail fuel station chains have repeatedly proposed illegal mergers, suggesting that the agency’s approach has not deterred firms from proposing anticompetitive transactions in the first place.”
The agency will also be “investigating abuses in the franchise market,” Khan wrote, explaining, “We will need to determine whether the power imbalance favoring large national chains allows them to force their franchisees to sell gasoline at higher prices, benefitting the chain at the expense of the franchisee’s convenience store operations.”
Khan’s letter was in response to a letter Deese sent her on Aug. 11, wherein he wrote that President Joe Biden “wants to ensure that consumers are not paying more for gas because of anti-competitive or other illegal practices,” and asked the FTC to investigate why “gas prices tend to rise more quickly to adjust to spikes in oil prices than they fall when the price of oil declines.”
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Gas prices have continued to climb in the U.S. since Biden took office in January, and the latest Consumer Price Index numbers from June showed a 48.1% increase from the year before. This rising prices at the pump are already a political liability for the administration as they scramble to try to bring them back down.
Earlier this month, the administration asked the Organization of the Petroleum Exporting Countries (OPEC) to produce more oil in an effort to boost supply in the U.S. and keep fuel prices at bay. Republicans condemned the move, with 23 GOP senators writing a letter lambasting the president over the decision.
“It is astonishing that your Administration is now seeking assistance from an international oil cartel when America has sufficient domestic supply and reserves to increase output which would reduce gasoline prices,” the senators wrote.
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Former President Donald Trump also slammed Biden for the move.
“We were energy-independent six months ago. Today, they’re negotiating with OPEC. And OPEC just told them no,” Trump told FOX Business’ “Mornings with Maria” in reference to OPEC officials telling Reuters that there is no need to ramp up production. “I filled up the national oil reserves when the oil was cheap. I filled them up for almost nothing. And now they want to use that oil because they don’t have any oil.”