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FOR IMMEDIATE RELEASE: April 5, 2004

SCHUMER TO QUESTION EXPERTS AT SENATE HEARING ON WHY GASOLINE & NATURAL GAS PRICES SHOT THROUGH THE ROOF THIS YEAR

With gasoline prices at record highs, average New York family could pay nearly $400 more for gas this year; Average natural gas user in NY has paid significantly more to heat their homes this year than last

Schumer, a member of the Senate Judiciary Committee, says committee must determine once and for all if market manipulation is to blame for the price surges; Hearing to be held this Wednesday, April 7

With gasoline prices at the pump hitting record highs and natural gas prices for home heating oil far outpacing last year's prices, US Senator Charles Schumer today announced that the Senate Judiciary Committee will hold a hearing on Wednesday, April 7 to investigate the cause of the high prices. Schumer, a member of the Judiciary Committee, said he will question witnesses at the hearing to determine once and for all if the price surges are the result of market forces or price manipulation.

"New Yorkers have been socked with a double whammy this year – outrageous gas prices at the pump and sky-high natural gas prices to heat their homes," Schumer said. "When the cost of basic necessities hits the roof, the impact on the economy is real because it prevents people from being able to spend on other things. It's a mystery what's going on here, and we're going to dig deep into this issue so we can get some answers."

Last week, Schumer released a new analysis showing that record high gas prices in New York could cripple families in each county of the state. According to the report, if gas prices continue to increase at its current level (27 cents per gallon over the last eight months), the cost for a year's supply of gasoline would go up nearly $400 for the average family. With the President refusing to defer deliveries to the Strategic Petroleum Reserve and OPEC deciding to decrease its oil supply, those prices could get even higher.

In addition, natural gas prices skyrocketed after Thanksgiving with little apparent reason. Usually, price increases are related to significant cuts in supply or increases in demand. But there were approximately three trillion cubic feet of natural gas in inventories across the country, which is an increase of approximately 7% over the same time last year. Natural gas stocks – the amount of natural gas in storage – were about 3 percent higher than the five-year average for such inventories, according to the US Department of Energy.

In response to the skyrocketing prices, Schumer pushed in January for federal hearings to investigate the irregularities in the gas markets to determine if there are any signs of market manipulation or other improper activities that would artificially raise prices for New Yorkers. "The stability of the natural gas marketplace is vitally important to the health of our nation's economy," Schumer wrote in January to Federal Trade Commission Chairman Timothy Muris. "Severe spikes in the price of natural gas threaten our economy by placing additional residential energy cost burdens on working families."

To determine the causes of the price irregularities for both gasoline and natural gas, Schumer today announced that the Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights will hold a hearing on Wednesday, April 7, 2004, at 2:30 pm. Schumer will attend and participate in the hearing to be presided over by Senator Mike DeWine of Ohio. Witnesses are expected to include Mark Cooper, Consumer Federation; Bill Kovacic, FTC General Counsel; and John Felmy, American Petroleum Institute, among others.

The hearing will take place in Room 226 of the Senate Dirksen Office Building.

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