Rising Oil Prices

Crude Oil Imports

In 2006 the top two countries we imported crude oil from were our neighbors: Canada and Mexico. The U.S. imports crude oil from over 60 countries. 69% of net imports of crude oil were from five countries: Canada, Mexico, Saudi Arabia, Venezuela, and Nigeria. Imports from all OPEC countries were 47% of total U.S. crude oil imports.

The Senate Judiciary Committee called the hearing to explore the skyrocketing price of oil, which earlier in the day crossed $132 a barrel for the first time. The committee questioned executives from Exxon Mobil (XOM, Fortune 500), ConocoPhillips Co. (COP, Fortune 500), Shell Oil Co. (RDSA), Chevron (CVX, Fortune 500) and BP (BP).

Hedge fund and institutional investors have entered the oil market seeking profits from trading, since a then-Republican Congress voted to let anyone buy oil futures a few years ago -- rather than just those who intend to use the oil to convert to petroleum products.

Democrats say oil speculation is responsible for 20 to 50 percent of the spike in fuel prices.

Rising gas prices

AAA daily gas prices

Sources of U.S. Net Petroleum Product Imports, 2006 (Total = 2.297 Million Barrels per Day)

Source: http://www.eia.doe.gov/neic/infosheets/preface.html

Oil and Gas Industries

The Federal Trade Commission maintains competition in the petroleum industry, and has invoked all the powers at its disposal – including the investigation of possible antitrust violations, the prosecution of cases, the preparation of studies, and advocacy before other government agencies – to protect consumers from anticompetitive conduct and unfair or deceptive acts or practices in the industry. In doing so, the FTC has assembled vast competition policy and enforcement expertise in matters affecting the production and distribution of gasoline.

This website describes the FTC’s oversight of the petroleum industry, with special sections on our activities related to merger enforcement, anticompetitive nonmerger activity, and gasoline price data. It also features reports and economic working papers, Congressional testimony, advocacy work, conference proceedings, and studies. Check it often for updates and information on new initiatives.

• March 7, 2008
  Alternative Power Sources: Part II
  
  
• February 21, 2008
  Alternative Power Sources: Beyond Petroleum
  
  
• October 9, 2007
  Alternative Fuels: Beyond Corn-Based Ethanol
  
  
• July 24, 2007
  Alternative Fuels: No Magic Bullet
  
  
• June 7, 2007
  What Is Driving Higher Prices?
  
  
• May 2, 2007
  Diesel – Fuel of the Future?
  
  
• December 12, 2006
  Pipelines: Interstate Highways for Gasoline
  
  
• October 30, 2006
  No Fuel Is An Island: The Interdependence Of Energy Markets
  
  
• October 13, 2006
  “Gas-Saving” Devices: FTC Protects Consumers From Bogus Products
  
  
• September 25, 2006
  Run Silent, Run Deep: New Discoveries Offshore
  
  
• September 5, 2006
  North to Alaska: The Effect of the Prudhoe Bay Pipeline Leak on U.S. Gasoline Prices
  
  
• August 15, 2006
  Diesel Problems in the Heartland
  
  
• July 21, 2006
  World Events and Crude Oil Prices: How They Affect What You Pay At the Pump
  
  
• June 30, 2006
  Focus On Gasoline Retailing
  
  
• June 15, 2006
  Hurricanes and Gasoline Prices
  
  
• June 6, 2006
  Supply And Demand Responses to Gasoline Prices
  
  
• May 30, 2006
  Gasoline Price Differences: Geography Matters
  
  
• May 18, 2006
  How Refining Capacity Affects Gasoline Prices: A Classic Story of Supply And Demand
  
  
• May 4, 2006
  The FTC’s Role in the Gasoline Industry

OIL

Price Monitoring

In May 2002, the FTC announced a project to monitor wholesale and retail prices of gasoline in an effort to identify possible anticompetitive activities and determine whether a law enforcement investigation would be warranted. Today, this project tracks retail gasoline and diesel prices in some 360 cities across the nation and wholesale (terminal rack) prices in 20 major urban areas. The FTC’s Bureau of Economics staff receives daily data from the Oil Price Information Service (OPIS), a private data collection company. Staff receives information weekly from the Department of Energy’s public “Gas Price Hotline,” and also reviews other relevant information that might be reported to the FTC directly by the public or by other federal or state government entities. An econometric model is used to determine whether current retail and wholesale prices each week are anomalous in comparison with historical data.

The Monitoring Project alerts FTC staff to unusual changes in gasoline and diesel prices so that further inquiry can be undertaken expeditiously. When price increases do not appear to result from market-driven causes, staff consults with the Energy Information Administration of the Department of Energy. FTC staff also contacts the offices of the appropriate state Attorneys General to discuss the anomaly and appropriate potential actions, including the opening of an investigation.

Good, Better, Best:

How to Improve Gas Mileage

Whether you are shopping for a new car or just trying to maintain the one you have, you can take some steps to get the best mileage out of your gas purchases. The Federal Trade Commission (FTC), the nation’s consumer protection agency, offers these tips to use fuel efficiently:

On the Road: Drive More Efficiently

• Stay within posted speed limits. Gas mileage decreases rapidly at speeds above 60 miles per hour.
• Stop aggressive driving. You can improve your gas mileage up to five percent around town if you avoid “jackrabbit” starts and stops by anticipating traffic conditions and driving gently.
• Avoid unnecessary idling. It wastes fuel, costs you money, and pollutes the air. Turn off the engine if you anticipate a wait.
• Combine errands. Several short trips taken from a cold start can use twice as much fuel as one trip covering the same distance when the engine is warm.
• Use overdrive gears and cruise control when appropriate. They improve the fuel economy of your car when you’re driving on a highway.
• Remove excess weight from the trunk. An extra 100 pounds in the trunk can reduce a typical car’s fuel economy by up to two percent.
• Avoid packing items on top of your car. A loaded roof rack or carrier creates wind resistance and can decrease fuel economy by five percent.

At the Garage: Maintain Your Car

• Keep your engine tuned. Tuning your engine according to your owner’s manual can increase gas mileage by an average of four percent. Increases vary depending on a car’s condition.
• Keep your tires properly inflated and aligned. It can increase gas mileage up to three percent.
• Change your oil. According to the U.S. Department of Energy (DOE) and Environmental Protection Agency (EPA), you can improve your gas mileage by using the manufacturer’s recommended grade of motor oil. Motor oil that says “Energy Conserving” on the performance symbol of the American Petroleum Institute contains friction-reducing additives that can improve fuel economy.
• Check and replace air filters regularly. Replacing clogged filters can increase gas mileage up to ten percent.

At the Pump: Use the Octane Level You Need

• Your owner’s manual recommends the most effective octane level for your car. For most cars, the recommended gasoline is regular octane. In most cases, using a higher octane gas than the manufacturer recommends offers no benefit. Unless your engine is knocking, buying higher octane gasoline is a waste of money.

In Advertising: Check Out Claims About “Gas-Saving” Gadgets

• Be skeptical of claims for devices that will “boost your mileage by an extra 6 miles per gallon,” “improve your fuel economy up to 26 percent,” or the like. EPA has tested over 100 supposed gas-saving devices — including mixture “enhancers” and fuel line magnets — and found that very few provide any fuel economy benefits. The devices that work provide only marginal improvements. Some “gas-saving” devices may damage a car’s engine or increase exhaust emissions. For more information and a full list of tested products, check www.epa.gov/otaq/consumer.htm.

In the Showroom: Consider the Alternatives

• Alternative Fuel; Vehicles (AFVs) operate on alternative fuels, such as methanol, ethanol, compressed natural gas, liquefied petroleum gas, electricity, and others designated by the DOE. Using these alternative fuels in vehicles may reduce harmful pollutants and exhaust emissions. FTC Rules require labels on all new AFVs to give the vehicle’s estimated cruising range and general descriptive information. Find out how many miles a new AFV travels on a tank or supply of fuel because, gallon for gallon, some don’t travel as far as gasoline-powered vehicles.

• Hybrid Electric Vehicles offer another option for car buyers. According to DOE and EPA, these vehicles combine the benefits of gasoline engines and electric motors and can be configured to achieve different objectives, such as improved fuel economy and increased power.

For more information on alternative fuel vehicles, call the DOE’s toll-free National Alternative Fuels Hotline, 1-800-423-1DOE, or visit DOE’s Alternative Fuels Data Center website at www.afdc.doe.gov. More information about both hybrid-electric and alternative fuel vehicles is at www.fueleconomy.gov.

For more energy saving tips for cars, visit the DOE's website.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. September 2005

Some of the advanced technologies typically used by hybrids include

Regenerative Braking.
The electric motor applies resistance to the drivetrain causing the wheels to slow down. In return, the energy from the wheels turns the motor, which functions as a generator, converting energy normally wasted during coasting and braking into electricity, which is stored in a battery until needed by the electric motor.

Electric Motor Drive/Assist. The electric motor provides additional power to assist the engine in accelerating, passing, or hill climbing. This allows a smaller, more efficient engine to be used. In some vehicles, the motor alone provides power for low-speed driving conditions where internal combustion engines are least efficient.

Automatic Start/Shutoff. Automatically shuts off the engine when the vehicle comes to a stop and restarts it when the accelerator is pressed. This prevents wasted energy from idling.

For fuel economy information on these vehicles, please visit the Compare Side-by-Side section.

For More Information

Energy & Environment website
This website connects you to FTC resources on energy labeling for consumer products, retail sales of electricity, environmental marketing claims, insulation and home energy issues, and fuel and automotive products.

May 8, 2008

Tax Foundation Research Helps Clarify the Gas Tax Debate

Fuel taxes have recently become a hot topic in the presidential campaign and in the media. Everyone has an angle on this issue. Environmentalists worry about the effect of gas consumption on the environment and want to use the tax to change consumers' behavior; motorists express outrage at the price they have to pay to fill up their tanks and demand tax relief; presidential candidates focus on the impact of the tax on the "middle class," and some politicians tell constituents and voters that government intervention is the only solution; some policymakers and media claim that big oil companies aren't paying their fair share and demand windfall profits taxes; and, finally, economists ask, What is the purpose of this tax, anyway?
Read more