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Associated Press
Gas prices such as these at a Marathon station in Chicago
last week are among the most expensive in the region. The
average price for regular gas in Milwaukee and Chicago
on Monday was $2.04 per gallon. The
U.S. average was $1.62.

High Midwest gas
prices fuel gouging
investigation

The EPA chief says there
is no evidence of a
supply shortage

By Deb Riechmann
Associated Press

NEW YORK -- President Clinton expressed frustration today that drivers in Chicago and Milwaukee are paying nearly 40 cents more per gallon than the rest of the nation and said, "What we don't know is whether there was any price gouging."

"It's been very frustrating to me," the president said in an interview on NBC's "Today" show.

"I'm quite concerned about it."

In Washington, Environmental Protection Agency chief Carol Browner said that a preliminary investigation has turned up "no reasonable answer" that any market force is to blame. She said there is no evidence of a supply shortage in the region.

And the cleaner-burning gasoline that companies were required to start producing as of June 1 would not explain the large spike, either.

Clinton said the Federal Trade Commission, the EPA and the Energy Department are looking into the problem.

"I'm very worried about it," Clinton said. "But I'm hoping we can break the logjam on it soon."

"The oil companies . . . owe us an answer," Browner said after meeting in the Capitol office of House Speaker Dennis Hastert, R-Ill., with lawmakers from Illinois, Wisconsin and Indiana.

Browner is handing information gathered in recent days by field investigators in the two cities over to the Federal Trade Commission. That agency, which Browner noted may have more success since it has subpoena powers, already had announced it would examine whether price-fixing or collusion in the oil industry was driving up prices.

Browner said that the average price for regular gas in Chicago and Milwaukee on June 12 was $2.04 per gallon; the average nationwide was $1.62.

In cities where cleaner-burning fuel is required -- excluding Chicago and Milwaukee -- it was only $1.63.

The administration and a bipartisan group of lawmakers intend to meet with representatives from the oil refiners again next week, Browner said.

The EPA and Energy Department met with officials from eight major oil refineries on Monday.

Also yesterday, the White House ordered the Transportation Department to look into whether supply problems are contributing to the problem, White House spokesman Jake Siewert said.

Lawmakers left the meeting with Browner clearly frustrated. Some blamed the EPA's stricter clean-air regulations and some blamed the oil industry, but none knew of a way to provide immediate relief.

"I don't think anybody knows whether it's the oil industry, the ethanol industry or the pipeline industry," said Rep. James Sensenbrenner, R-Wis.

The oil industry say factors include a patent dispute over the process to make the new reformulated gas, a major pipeline break three months ago, the beginning of the high-demand summer driving season, and higher costs for crude oil.

But Sen. Dick Durbin, D-Ill., and a few others said the industry is gouging the public. "It's an increase directly attributable to profit-taking by the oil companies," he said.

Hastert said he has not yet reached that conclusion but expects to learn more next week.

The reformulated gasoline program requires fuel sold in the nation's most-polluted cities to be blended with an oxygenate that makes it burn cleaner.

Tighter pollution-reduction goals this year require ethanol, which is used in Chicago and Milwaukee, to be mixed with a more expensive gasoline, and some are blaming that for the soaring prices.