______________________________________________________________________________

FOR RELEASE: CONTACT:

June 29, 2000 Sampak Garg/ Cori Flam

(202) 225-6906

Congressional Hearing on Gas Crisis Reveals

Charges of Price-Gouging, Record Oil Company Profits, and

Racially-Discriminatory Zone Pricing

In the aftermath of a House Judiciary Committee hearing on the gas price crisis in the Midwest yesterday, Rep. John Conyers, Jr., (D-MI), Ranking Member of the Committee, issued the following statement:

"At yesterday's House Judiciary Committee hearing, the chief executives of the big oil companies, instead of coming to testify before us, sent their trade association, the American Petroleum Institute. This was the third time in three months that the major oil companies were not here to testify at a Judiciary Committee hearing on rising gas prices. If the big oil companies don't have anything to hide, why wouldn't they ask to testify and rebut charges that they are price-gouging consumers, reaping huge profits, and engaging in racially-discriminatory pricing.

"I am shocked that, in the past year, gas prices have risen sixty cents or more per gallon. In fact, the price of gas in Detroit has skyrocketed to $2.09, eighty cents higher than it was last year. This is striking directly at the pocketbooks of American consumers in the height of family vacation season and at the paychecks of those who depend on their vehicles for a living.

"What is more alarming is that the oil companies have had record profits during this crisis. Public Citizen, a Washington, DC-based consumer organization, has reported that the big oil companies had remarkable profit increases when comparing the first quarter of this year with the same period last year. For instance, Texaco's profits for that period were up 473%, Conoco's were up 371%, and BP Amoco's increased 296% - and that is just a few of the major oil companies. It cannot be mere coincidence that profits are increasing at the same time that prices at the pump are skyrocketing.

"The Committee also has heard disturbing allegations that the big oil companies are charging more for gasoline in minority and poor neighborhoods than in adjacent areas, a practice known as zone pricing. In fact, at an April 7, 2000 Committee hearing, we learned that Shell Oil has set the wholesale price of its oil at six to seven cents more per gallon in the predominantly poor and minority areas of Cleveland, Ohio, when compared to other Cleveland neighborhoods. Unfortunately, while the Robinson-Patman Act proscribes some forms of discriminatory pricing schemes, the Federal Trade Commission has brought very few cases under it.

"We can and will take action on these matters:

• •At our request, the Federal Trade Commission is investigating the oil companies and other, related industries for potential antitrust violations.

• •I have a commitment from the Judiciary Committee Chairman that we will hold more hearings on price gouging and racially-discriminatory zone pricing and will have the oil company executives at those hearings.
• •I will to introduce legislation that will prohibit racially-discriminatory zone pricing.
  
  

We must not let the big oil companies continue to victimize American consumers.

###106-120###