Washington (CNSNews.com) – President Barack Obama has ordered the Justice Department to investigate the alleged manipulation of gas prices to protect U.S. consumers from potential fraud, but dramatic evidence of a free-market in gas prices can be found at a pair of gas stations located just blocks from the Justice Department itself.
In the 2000 block of Virginia Avenue in Washington, D.C., two gas stations almost directly across the street from one another were selling regular unleaded gasoline for prices that differed by 94 cents a gallon.At an April 21 town hall gathering in Reno, Nev., Obama said: “The attorney general is putting together a team whose job it is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators.”
“We’re going to make sure that nobody is taking advantage of American consumers for their own short-term gain,” he said.
But in the shadow of the Watergate in Washington, D.C. , a Sunoco station and Exxon station both in the 2000 block of Virginia Ave., NW were selling gasoline for dramatically different prices.
On April 22, the price for a gallon of regular gas at the Exxon station was $4.99. At the Sunoco station across the street, the price was $4.05 for a gallon of regular--a difference of 94 cents. (As of Apr. 27, the price for a gallon of regular at the Exxon station was still $4.99 and at the Sunoco station the price had risen to $4.19, making an 80-cent difference.)
Prices tend to be lower when gasoline is unbranded, and higher when gasoline is name-brand, according to a 2005 GAO report explaining the factors that affect gasoline prices.
A spokesman for Sunoco, Inc., told CNSNews.com that the fuel sold at the Sunoco station on Virginia Avenue is name-brand gasoline. The manager of the Exxon station on that street said it also sells name-brand gasoline.
The Exxon station is independently owned and the fuel there "is required to meet to meet ExxonMobil's product specifications," Laura Paredes, an ExxonMobil public affairs spokesperson, told CNSNews.com. She also said that "less than 15%" of such stations "are actually owned/operated by Exxon/Mobil" across the country.
The newly created Oil and Gas Price Fraud Working group, ordered by the president, includes representatives from the Department of Agriculture, the Department of Justice, the Department of Energy, the Department of the Treasury, the National Association of Attorneys General, the Federal Trade Commission, the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.
Prior to the creation of the new working group, from 1999 to 2007, the Federal Trade Commission investigated potential fraud in the energy markets.