FTC to investigate allegations of oil market manipulation

WASHINGTON - Under pressure from Congress, the Federal Trade Commission said it will investigate allegations that market manipulation contributed to a 24 percent increase in gasoline prices in the last year.

The agency will exercise new authority granted by Congress last year to study whether regulations are needed to prevent manipulation, the FTC said yesterday. The first step in a formal "rulemaking process" will be to seek public comments, the agency said.

"We understand that consumers are being hurt by high gas prices, and the commission remains vigilant in using its full authority to prevent unlawful behavior," FTC chairman William E. Kovacic said in a statement.

The FTC's action came amid mounting pressure on the agency from Democratic lawmakers to use the authority granted in the energy legislation to craft rules.

Last week, House Speaker Nancy Pelosi and other Democratic leaders told Kovacic in a letter that the agency had "failed to exercise its power to protect consumers from skyrocketing energy costs."

At a Senate Commerce Committee hearing last month, Washington Democrat Maria Cantwell, who pushed the market-manipulation provision of the energy legislation, extracted a pledge from Kovacic that the agency would begin a rulemaking procedure that might lead to adoption of regulations.