Oil Companies Keep Capacity Low so They Can Keep Prices High

May 16, 2007
Oil Companies Keep Capacity Low so They Can Keep Prices High

NEW YORK (CNNMoney.com) -- Big Oil went on the defensive Wednesday, getting grilled before a House panel and denying accusations that mismanagement and a lack of competition are the reasons behind this spring's record gasoline prices.

Gas prices hit $3.10 a gallon Wednesday, according to AAA. It's the fourth record day in a row, and the surge has been attributed to low gasoline supplies caused by a lack of refining capacity.

"They have no interest in building spare capacity because that would undermine their pricing power," Mark Cooper, research director for the Consumer Federation of America, said prior to a hearing by a House Judiciary Committee antitrust panel n Washington Wednesday.