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FTC Pinpoints Post-Katrina Gas Gouging

The Federal Trade Commission on Monday said it found 15 examples of gasoline price gouging after Hurricane Katrina, though the agency said it has not identified any widespread effort by the oil industry to illegally manipulate the marketplace.

The agency sought to downplay the instances of price gouging by seven refiners, two wholesalers and six retailers, chalking up their soaring prices in September 2005 to "regional or local market trends."

For the purpose of the report, and as mandated by Congress, the FTC defined price gouging as "any finding" that the average price of gasoline in designated disaster areas in September 2005 was higher than in August 2005.

The FTC was first directed by the energy law passed last August — before Katrina — to investigate whether oil companies manipulated the price of gasoline in any way, including whether they intentionally held back refining capacity to keep supplies artificially tight.

This part of the agency's probe found "no instances of illegal market manipulation."

But the report — mandated last September — found only one gas-station owner, who is not named in the report, who intentionally tried to cash in, CBS News correspondent Dan Raviv reports. The other 14 retailers noted in the report had raised prices out of confusion — they were not being malicious, the FTC says.

Earlier this month, the House approved criminal penalties and fines of up to $150 million for energy companies caught price gouging, yet lawmakers acknowledged there is no quick and easy fix to higher pump prices.

President Bush summoned Democrats and Republicans to the White House to discuss legislation to address long-term energy concerns.

"The price of gasoline should serve as a wake-up call ... that we've got an energy security problem and a national security problem and now is the time to deal with it in a forceful way," Mr. Bush said after the meeting.

The surge in gasoline prices has placed intense pressure on the GOP. A new CBS News poll found that 74 percent of Americans disapprove of Mr. Bush's handling of the gas crisis.

Rep. Rick Boucher, D-Va., said the problem was not a delay in permitting.

"The real reason we have a refinery shortage is the companies that own refineries are profiting enormously from the ... refinery bottlenecks," he said.

Congress demanded separate investigations into the industry's pricing activities — as well as its enormous profits — after Hurricane Katrina, which severely disrupted the flow of oil and natural-gas in the Gulf of Mexico and also caused the shutdown of onshore refineries and pipelines.

In the week after the hurricane, retail gasoline prices leapt 46 cents to a record nationwide average of $3.07 per gallon.

After price surges in recent months, gas buyers got a small break ahead of Memorial Day weekend.

"Gasoline prices fell a penny-and-a-half in the past two weeks. Self-serve regular is now $2.93 a gallon," gasoline market surveyor Trilby Lundberg told CBS Radio News. "It's the first drop since February."

The nationwide Lundberg Survey of roughly 7,000 gas stations, published Sunday, covered the period from May 6 through May 19.

Self-serve regular was down from about $2.95 two weeks ago.