WASHINGTON -- The head of the Federal Trade Commission (FTC) is predicting that Congress will pass a gasoline price-gouging law despite her warnings that the country doesn't need one and it might cause fuel shortages.
FTC Chairperson Deborah Platt Majoras said she has warned Congress publicly and privately about the dangers of such a law. We looked very carefully, but didn't see any new legislation needed to protect consumers, Majoras said at an antitrust conference late last week, according to the Associated Press. Will new legislation be passed? I [image-nocss] think we will see a price-gouging statute pass, perhaps at the end of this [incoming] Congress.
With gasoline prices rising to over $3 per gallon this spring, the House passed a bill permitting large fines and jail time for price gougers. The Senate has not acted on it, and Senator Max Baucus (D-Mont.), the incoming Finance Committee chairperson, said. There's a lot more that has a higher priority.
Majoras said she understood the public's frustration and concern, but said an upcoming FTC report on the price spikes found that consumer demand was up at the time. There is a distinction between a market determination you don't like and a market failure, she said.
Testifying in May before the Senate Commerce Committee, Majoras said retailers might let the gasoline run out rather than raise prices and risk facing prosecution. She noted the price spikes after Hurricane Katrina last year resulted in more fuel getting to market.
Majoras, who has previously questioned whether a price-gouging law could easily be enforced, said that despite her concerns, the agency would enforce the law if it passed.
The Justice Department's top antitrust official, Assistant Attorney General Thomas O. Barnett, attended the conference and said addressing fuel prices was a tricky issue for his agency. He said that like all cartels, the Organization of Petroleum Exporting Countries (OPEC) is bad for consumers. But he said any effort to hold OPEC to U.S. competition laws would have to be balanced with national security and diplomatic interests.
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