ILMA Preparing Comments to FTC on Major Oil Company Pricing
ALEXANDRIA, VA (June 9, 2008) — ILMA has announced that it is preparing to submit comments to the Federal Trade Commission (FTC), renewing its criticism of pricing practices by major oil company suppliers. In recent months, with the sharp increase in the cost of crude oil, ILMA members have complained that they have received numerous base oil price increases from suppliers that become immediately effective. However, these same suppliers delay finished product price increases for 45 to 60 days, causing a price "squeeze" on independent lubricant manufacturers.
At issue is the appropriate way to interpret and enforce the provisions of the Energy Independence and Security Act of 2007 (EISA) related to preventing market manipulation in the petroleum industry.
EISA includes two sections giving the FTC new authority to promulgate regulations prohibiting "market manipulation" and to enforce the statutory prohibition against the provision of "false or misleading" information in the petroleum industry. The statute describes how the Commission could enforce any violation, such as an "unfair or deceptive act or practice" proscribed by a rule issued pursuant to the FTC Act. Under EISA, the FTC can take the same range of actions against anyone violating a rule against market manipulation allowed under its independent FTC Act authority - for example, including filing a civil action in federal district court seeking a temporary restraining order or a preliminary injunction to prevent the violation of any Commission rule developed under EISA.
The FTC recently issued an Advance Notice of Proposed Rulemaking, setting forth a series of questions and issues for consideration by those wishing to submit comments.
ILMA has asked its members for assistance with data in preparing comments. While ILMA can obtain historical pricing data, especially over the past six months, ILMA General Counsel Jeff Leiter issued a call for anecdotal information that members could share. The deadline for comments is June 23, so ILMA requested the member input as quickly as possible.
"ILMA continues to be concerned that its members are covering their suppliers' delays in finished lubricants price increases through the immediate base oil price hikes," said ILMA General Counsel Jeff Leiter. "We want to convince the FTC that it is time for the Agency to take a hard look at the level of competition in the lubricants industry, especially for base oils."
Leiter added, "ILMA recently asked members to invite their Congressmen for plant visits. It is a perfect time for members to discuss their concerns with competition in the lubricants industry with their Member of Congress."
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The Independent Lubricant Manufacturers Association (ILMA) was founded in 1948. ILMA's 292 members include independent lubricant companies that produce more than 25% of all lubricants and 80% or more of the metalworking fluids and other specialty industrial lubricants sold in the U.S., and key suppliers of raw materials and services to independent lubricant manufacturers.
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