Sen. John W. Warner (R-Va.) said last night that a study by the General Accounting Office indicates "evidence of price gouging" in the fast-rising cost of home heating oil in the Washington area.
Warner, who requested a study of heating oil prices last summer, reacted to issuance of the GAO report yesterday by sending a letter to Energy Secretary Charles Duncan criticizing the Energy Department for inaction and asking the federal agency to advise Congress what should be done about costs, which increased 58 percent last year.
Warner said the GAO report indicated that excess profits are being made "not by distributors here, but by refineries far removed from the Washington area."
The GAO report said that white refiners contend that their prices are "reasonable and necessary," the Department of Energy "did not analyze refiners" and wholesalers' costs, margins and selling prices to determine their reasonableness or validity."
Warner said that GAO asked energy officials for data on Dec. 4, and when they failed to respond, he told the watchdog agency to publish its report.
"We cannot wait until spring" for DOE to look into the pricing practices, Warner said. "People are suffering this winter."
Warner said Congress "may have to restore controls on heating oil (decontrolled in 1976), although I hope that is not the case. But we've got to stop the suffering."
GAO said "DOE's lack of response to increased heating oil prices is particularly distressing in view of studies which describe the severe economic hardships higher energy bills pose for the poor and the elderly."
Warner added that "the good news is" that supplies of home heating oil should be adequate this winter, even though Washington-area customers "are likely to pay higher prices than consumers in most major U.S. cities."