Senator Wants Probe of Oil Companies, High Gas Prices

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en. Charles Schumer (D-N.Y.) said Tuesday that he wants a federal investigation of oil companies, which he said are holding back gasoline production amid soaring prices, news services reported.

President Bush also said Tuesday that his administration would monitor excessive pricing, Reuters reported.

“The government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging, and we will do just that,” the president told reporters.

Schumer said that following a wave of mergers in the oil industry, gasoline prices were easier to manipulate, increasing the need for Congress to make sure the industry is not gauging consumers, Reuters reported.

He said prices had risen 15% to $2.97 a gallon in New York City in the past month. Refiners are processing about 85% of their capacity, he said, while they should be running at about 90% capacity, Reuters reported.

Following Schumer’s comments, the American Petroleum Institute said in a statement that the oil industry is still recovering from Hurricanes Katrina and Rita and that three refineries still closed from those storms account for about 5% of U.S. refining capacity.

Charges of price gauging also do not account for more ethanol being added to gasoline this year because of fuel-additive mandates, which makes gasoline more expensive to produce, the oil industry trade group said.