NEW YORK — The Federal Trade Commission said Thursday that it would begin policing the petroleum industry with new penalties for anyone attempting to manipulate energy prices.
The rule, which will go into effect in November, targets anyone dealing with crude oil, gasoline and petroleum distillates. It prohibits market distortions through false or misleading statements about stockpiles, prices or crude and fuel output.
As part of its new powers, the FTC will monitor reports from petroleum refiners on the amount of gas held in storage by refiners. Those figures, which are collected and published by the Department of Energy each week, can push prices up or down.
Analysts and traders depend on government inventory reports when buying crude and gasoline futures. The future price in turn helps set wholesale and retail gasoline prices.
"This new rule will allow us to crack down on fraud and manipulation that can drive up prices at the pump," said FTC chairman Jon Leibowitz. "We will police the oil markets and if we find companies that are manipulating the markets, we will go after them."
Violators would face a civil penalty of up to $1 million per day.
Congress broadened the FTC's powers to scrutinize petroleum companies when oil prices started rising in 2007, eventually driving retail gasoline above $4 a gallon last summer.
FTC Deputy Assistant Director Patricia Galvan said the commission hasn't policed the petroleum industry like this before.
It's already illegal to lie on government petroleum inventory reports, but Galvan said the rule covers information the industry gives to public and private sources.
John Felmy, the chief economist at the American Petroleum Institute, said the FTC rule could backfire, resulting in less information for the marketplace as refiners and other petroleum companies hold back on reporting anything not required by law.
"Firms don't want to do anything that could be interpreted later as a violation," Felmy said.
Refiners currently volunteer information about petroleum supplies and wholesale gas prices to companies like Platts, the energy information arm of McGraw-Hill Cos.
Felmy said he's unaware of any petroleum refiners reporting fraudulent market data. The FTC issued a report two years ago that found no evidence of price fixing during the summer of 2006.
The Commission rule does not target speculators, which also have been blamed for manipulating energy prices. A different federal agency, the U.S. Commodity Futures Trading Commission, is expected to decide whether to place trading limits on speculators later this year.
Separately, oil prices fell below $72 a barrel Thursday and natural gas prices tumbled on more evidence of consumer anxiety and also growing supplies of unused crude and natural gas.
Benchmark crude for September delivery lost 3 cents to settle at $71.94 a barrel on the New York Mercantile Exchange. Still, crude prices have been rising since mid-July and dragging retail gas prices along.
Prices at the pump have risen every day since July 22, when the national average peaked just above $2.69 per gallon.
Prices added less than a penny overnight to $2.61 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. That's almost a dime more than last week and gas is now about as expensive as it was at this time last month.
The average for a gallon of regular unleaded in the Charleston area was around $2.38 Thursday, up more than two cents from Wednesday, AAA said.