|Received:||5/17/2008 9:19:40 AM|
|Agency:||Federal Trade Commission|
|Rule:||Prohibitions On Market Manipulation and False Information in Subtitle B of the Energy Independence and Security Act of 2007|
Comments:Market Manipulation Rulemaking, P082900 The FTC is seeking public comment regarding actions they can take to guard the public from abuse in these days of raising fuel costs. The best protection against abuse in an open market is a well informed consumer. Well informed consumers will act in their own best interest to avoid being abused. Today consumers have no idea what a $5 increase in crude prices means to the final cost of fuel at the pump. They assume it will go up but have no information regarding how much. This lack of knowledge creates a perfect opportunity for abuse by retailers, distributors and refiners. Today, consumers see the price of oil published daily on the front page. This information however has no direct bearing on what the proper cost of gas should be at the pump. The public is unaware of the margins and value added at each stage of production, distribution and retail sale. The FTC can educate consumers to help them be more aware of what the proper cost of fuel should be. Here is how it can be done. Take the cost of oil and create a formula to help calculate the cost at each stage of the process. How much does it cost to transport oil to the refinery, add to that the average cost of refining, add to that the average cost of distribution and you have a cost point to the retailer. Add to that the average margin for retailers and you have the cost of a gallon of gas at the pump. By publishing these numbers the FTC can help retailers and consumers be better informed on the costs they should be paying without being abused. Regional differences do exists but these factors can easily be included and published. This effort would require little effort, requiring only one or two well informed analysts but will do a great work in making the public well aware of the cost of production and distribution, therefore the cost they should be paying at the pump. Instead of spending tons of money trying to regulate and oversee a national market the FTC can accomplish the objective by simply getting this information into the marketplace for public understanding. Helping consumers indentify when they are being abused will eliminate the opportunity for abuse.