CBS Pushes Liberal Price Gouging Storyline (Again)

CBS Pushes Liberal Price Gouging Storyline (Again)
Evening News favors new allegations over other reasons for high prices, ignoring FTC report that found no price manipulation.

By Ken Shepherd
Business & Media Institute
June 6, 2006

     When the federal government reported on May 22 that there was no concerted effort in the oil industry to manipulate gasoline prices, CBS Evening News ignored the news. Yet two weeks later on the June 5 Evening News, correspondent Sandra Hughes was reporting price fixing allegations by Californias attorney general and a consumer group.

     Hughes began her story noting that Californias attorney general is demanding oil company executives testify under oath about gas prices. This is legal thievery in my view, and it is because it is an oligopoly, Hughes showed the states top lawyer, Bill Lockyer, arguing.

     Lockyer is known for once suggesting at a press conference in 2001 that hed like to see former Enron chief Ken Lay raped in prison and for taking fast food companies to court in 2005 over French fries.

     To agree with Lockyer, Hughes introduced Tim Hamilton, a petroleum industry consultant hired by a consumer group to investigate why Californias gasoline stockpiles run so much lower than the rest of the country. In fact Hamilton authored a study for the consumer group, which was the liberal Foundation for Taxpayer and Consumer Rights. His study charged oil companies with deliberate price manipulation in California.

     Although Hamiltons study came out two days after the Federal Trade Commission (FTC) found no evidence of price gouging in the petroleum industry, Hughes failed to point out the government verdict.

     The CBS correspondent also left out other reports, including those from Californias own state energy department and the federal Government Accountability Office (GAO), that placed blame on government for higher fuel costs.

     Most (about 90%) of our gasoline is refined in-state, but additional quantities of gasoline and blending components are imported because refining capacity cannot keep pace with growing demand, the California Energy Commission noted on its Web site. The commission also lists stringent federal air quality regulations, heavy demand, and isolation from other refining centers in the United States as contributing to high gas prices.

     Californias taxes are also a significant factor in gas pricing.

     In addition to 36 cents per gallon in federal and state excise taxes, Golden State drivers pay on average roughly 8 percent or between 16 and 25 cents to a gallon depending on the local tax rate and the final price of the gasoline, according to the California Energy Commission.

     A June 2005 study by the GAO demonstrated that Big Government had a role in producing pain at the pump for some consumers.

     Although special gasoline blends mandated in states like California have helped reduce emissions and improve air quality, the introduction of these blends appears also to have divided the gasoline market, the federal agency concluded. Overall, this transformation of the gasoline market has complicated the supply infrastructure, increased production and delivery costs, and reduced the availability of gasoline, in some cases.

     The Business & Media Institute reported on the medias lack of interest in the FTC price gouging report.