The Bush administration yesterday joined the chorus of criticism from consumer groups, Congress and others against the surge in gasoline prices that followed Iraq's invasion of Kuwait.
The Justice Department said it would study the rise in gasoline prices that followed the invasion, promising "vigorous antitrust prosecution" for any violation of federal laws prohibiting price fixing.
The announcement came as the White House, through spokesman Marlin Fitzwater, urged American oil companies to show restraint on gasoline price increases in the wake of the invasion.
The departments of energy and transportation also echoed the administration stance. The Energy Department said it would monitor oil markets closely and share information with the Justice Department, while Transportation Secretary Samuel Skinner urged transportation companies "not to overreact" to Middle East events.
On Capitol Hill, Rep. Frank Annunzio (D-Ill.), chairman of the House financial institutions subcommittee, appealed to President Bush "to immediately use the power of your office to obtain from the oil companies a rollback" in prices at the pump.
Prices for unleaded gasoline have risen between 4 and 15 cents a gallon since last Friday, with the biggest increases occurring in Alaska and California. Locally, prices have risen between 5 and 7 cents a gallon, and are expected to go higher, according to the American Automobile Association and other groups monitoring gasoline costs.
Major oil companies yesterday increased prices by 2 cents a gallon at company-owned stations and 5 cents a gallon for independent dealers, said a Houston oil trader.
Spokesmen for U.S. oil companies contend that the increases are necessary to discourage panic buying, which could lead to a run on gasoline inventories and cause spot shortages. Also, the oil companies say, the volatile situation in the Middle East is bound to cause an explosion in their costs, affecting the prices of future purchases and shipments of crude oil.
Those disclaimers, however, carried little weight with state and federal lawmakers, who have been hearing from outraged consumers about rising gasoline prices.
In Maryland, state officials said they suspected the recent price increases might stem from "price gouging" on the part of oil refiners rather than events in the Middle East.
At a press conference in Annapolis, Gov. William Donald Schaefer said he saw no reason for prices to have gone up so quickly after the Iraqi invasion. Schaefer said he will ask the General Assembly to study what happened.
Maryland Comptroller Louis Goldstein, whose office monitors gasoline tax receipts, has asked 28 major refiners and brokers in the state to explain why they raised prices, in one case by more than 15 cents per gallon.
Marvin Bond, a spokesman for Goldstein, said a review of tax records shows gasoline consumption is down in Maryland as much as 5 percent from last year. He speculated that recouping the resulting lost revenue may be a reason refiners and brokers raised prices.
Maryland Attorney General J. Joseph Curran Jr. said he would review the answers oil companies send to Goldstein before deciding whether antitrust and consumer protection lawyers in his office should investigate further.
One thing state officials did agree on is that the price increases were initiated by the major oil companies and refiners, forcing smaller-scale distributors and retailers to raise prices at the pump.
Crown Central Petroleum Corp., a major Maryland-based refiner, for example, yesterday notified its customers of a 4.7 cents per gallon increase, effective midnight tonight. The price that Amoco Corp. charges retailers for a gallon of regular unleaded gasoline has risen since Thursday from 75 cents to 82.3 cents, according to a service station trade group official.
Ellen Valentino, a lobbyist for 1,500 service stations in the Washington suburban area, said dealers across the state are as captive as consumers. They normally refill their holding tanks three or four times a week, so refiners' price changes are felt quickly.
Oil prices "are changing almost twice a day and my dealers are putting the increase on the pump," Valentino said. "They have to. You cannot eat an increase of 5 cents, 6 cents -- that is thousands of dollars."
In New Jersey, Gov. James Florio asked the Bureau of Public Utilities and the state consumer affairs department to investigate the gasoline price increases, which have averaged 5 cents a gallon there.
Jerry Ferrara, executive director of the New Jersey Gasoline Retailers Association, said retailers aren't to blame because they are simply passing along wholesale price increases imposed by major oil companies.
Ferrara called the wholesale price increases "unconscionable."
"We had increases that started Thursday and by Saturday most of the major oil companies had raised their prices by 5 to 8 cents a gallon," Ferrara said.
Staff writer Steven Mufson contributed to this report.