A US Senate committee added an amendment that would make gasoline price gouging a federal crime, and then the committee approved a bill to improve automotive fuel efficiency requirements.
The Commerce, Science, and Transportation Committee on May 8 approved by voice vote S. 357, which would raise Corporate Average Fuel Economy standards and add the requirements to medium and heavy-duty trucks, after adopting the price gouging amendment offered by committee member Maria Cantwell (D-Wash.).
“Regular gas prices in Washington state are averaging $3.40 right now. That’s higher than last year or in the aftermath of Hurricane Katrina. We need better consumer protections on the books,” Cantwell said after the hearing. “Gas prices and oil company profits are both at record levels, and consumers are left with no way of knowing whether they’re being taken for a ride.”
Her amendment, which she introduced last week as a separate bill, would give the US Federal Trade Commission power to investigate allegations of fuel price manipulation. The US Department of Justice would enforce criminal penalties for gasoline price gouging during national emergencies, such as the oil market disruptions following Hurricane Katrina in 2005, she said.
The amendment’s adoption prompted Charles T. Drevna, executive vice-president of the National Petrochemical & Refiners Association, to express concern over its potential consequences.
“Legislation that attempts to curtail the activity of free markets will inevitably harm consumers,” Drevna said. “During times of emergency and supply disruption, rising prices play an important role in limiting economic harm. They signal suppliers to increase production and bring fuel to affected areas while at the same time encouraging consumers to conserve.
His comments came in a letter to Daniel K. Inouye (D-Ha.), the committee’s chairman, and Ted Stevens (R-Ark.), its vice-chairman.
Rumblings in House
Meanwhile, two House subcommittee chairman separately announced that they would hold hearings to investigate causes of higher gasoline prices.
Rep. Bart Stupak (D-Mich.), who chairs the Energy and Commerce Committee’s Oversight and Investigations Subcommittee, said on May 8 that the subcommittee will examine causes of fluctuating fuel prices in a hearing expected in the next 4 weeks.
“When there is little transparency in how a product like gasoline is priced, there is room for gouging,” said Stupak, who introduced a bill in February to give the FTC the power to investigate fuel price manipulation allegations.
His announcement followed one on May 3 by Rep. Dennis J. Kucinich (D-Ohio), chairman of the Oversight and Government Reform Committee’s Public Policy Subcommittee, of a hearing on June 7 to address high gasoline prices.
Kucinich said he sent a letter to chief executives of seven major oil companies on Apr. 10 demanding explanations for record gasoline prices. He is reviewing their responses.
“I have long been concerned about the activities of oil companies,” Kucinich said. “I will be asking them pointed questions to determine if manipulation is a factor in raising prices.”
