The Consumer Federation of America, a consumer watchdog group, says big oil companies are trying to stop the growth of the ethanol industry… and Big Oil is using consumers’ pocketbooks in the fight.
In a report entitled “Big Oil’s Choke Hold: How Competition from Ethanol Can Help Lower Gasoline Prices for Consumers,” CFA charges that oil companies have used their market power to limit the supply of gasoline, keep consumer prices and profits high while opposing policies that would increase fuel supplies and lower prices. The report goes on to say that the increase in ethanol should have had the opposite effect. This comes from a CFA press release:
“This week when they announce their profits, the major oil companies will once again report huge windfalls at the expense of consumers who are paying record prices at the pump,” said Dr. Mark Cooper, CFA’s Director of Research. “The major oil companies have not only systematically failed to increase their refining capacity to meet growing gasoline demand, but now, threatened with
competition, are fighting hard against policies to expand production of ethanol and alternative fuels.”
The report goes on to say Big Oil has threatened to offset ethanol’s increasing production by cutting back its refining of gasoline and diesel fuel in an effort to restrict ethanol refining. Cooper also says oil company mergers have made it easier for the handful of companies to keep those gasoline supplies tight.
You can read all of CFA’s report by clicking here.