Justice Department probes oil markets

President Barack Obama announced yesterday that the Justice Department is assembling a team to "root out any cases of fraud or manipulation" in oil markets that might be contributing to $4-a-gallon-plus gasoline prices.

"We are going to make sure that no one is taking advantage of the American people for their own short-term gain," Obama said at a town-hall style meeting at a renewable energy plant in Reno.

The national average price for a gallon of regular gasoline was $3.84 yesterday, about 30 cents higher than a month ago and almost a dollar higher than a year ago. (On Long Island, the average hit $4.10 Wednesday.)

Obama, decrying such levels as yet another hardship "at a time when things were already pretty tough," said Attorney General Eric Holder was forming the Financial Fraud Enforcement Working Group.

It will focus some of its investigation on "the role of traders and speculators," Obama said. The group will include cabinet department officials, federal regulators and the National Association of Attorneys General.

Holder, in a statement in Washington, promised to "be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity. If illegal conduct is responsible for increasing gas prices, state and federal authorities should take swift action."

In a Justice Department memo accompanying his statement, Holder suggested no evidence had turned up yet of unlawful price manipulation.

"Based upon our work and research to date, it is evident that there are regional differences in gasoline prices, as well as differences in the statutory and other legal tools at the government's disposal. It is also clear that there are lawful reasons for increases in gas prices, given supply and demand," the memo said.

There's not much Obama can do to affect the price of gasoline in the short term, something he acknowledged.

Given that no evidence has surfaced of actual fraud or price manipulation, Obama's remarks appeared, at least in part, as an attempt to assuage public anger over rising prices.

In an Associated Press-Gfk poll last month, 51 percent of adults said they believe the rise in gas prices were due to "oil companies that want to boost profits" rather than changes in the global oil market.