Governors Seek Gasoline Price-Gouging Probe

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ight Democratic governors have asked President Bush and congressional leaders to investigate possible gasoline price gouging in the aftermath of Hurricane Katrina, the Associated Press reported.

In a letter, the governors urged an investigation into “excessive profits being made by oil companies who are taking advantage of this national crisis,” AP reported.

The letter was signed by the governors of Oregon, Wisconsin, Michigan, Illinois, New Mexico, Iowa, Montana and Washington, AP said. It also urged Congress to refund any excessive profits to consumers.

The letter cited a study by University of Wisconsin economist Don Nichols that found the hurricane was not entirely to blame for high gasoline prices.

Historically, Nichols said, the markup between the price of a gallon of crude and a gallon of gasoline is about 85 to 90 cents a gallon, including refining, distribution and taxes.

The study estimated that for pump prices to reach $3 a gallon, the price of crude oil would have to be about $95 a barrel, but crude oil prices topped out briefly at $70 in Katrina’s wake and have held in the mid-$60s a barrel, AP said.

A White House spokesman said President Bush had not seen the governors’ letter Tuesday, but said the president has asked Attorney General Alberto Gonzales to handle any price-gouging allegations.

Last week, the Senate passed legislation requiring the Federal Trade Commission to investigate accusations of gasoline price gouging.