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: FTC to investigate retail gas market for ‘collusive’ schemes to raise prices

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Federal regulators are taking a closer look at the market for gasoline to root out illegal practices that could be leading to higher prices at the pump, following a White House request.

Lax oversight of mergers in the oil and gas industry may have created “conditions ripe for price coordination and other collusive practices,” Federal Trade Commission Chair Lina Khan said in a letter dated Aug. 25 to Brian Deese, director of President Joe Biden’s National Economic Council.

The letter was in response to a White House request earlier this month to investigate the matter.

Crude oil prices
CL00,
+0.44%

have risen sharply in recent months in concert with a recovering global economy, which has led to higher gas
RBU21,
+1.58%

prices for American consumers. The average price of a gallon of gasoline was $3.15 during the week ended Aug. 23, according to the Energy Information Administration, up 96 cents from a year earlier.

Khan said she would direct staff to “identify additional legal theories” that could be used to challenge mergers in the gasoline industry, while taking steps to deter mergers by rescinding a policy that has “allowed companies to propose facially anticompetitive mergers with impunity.”

She also said the agency would investigate abuses in the franchise market for retail gas stations.

“Many retail fuel stations are franchised, but most franchisees have no control over prices at the pump,’ Khan wrote. “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.”

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