WASHINGTON -- Out of 228 respondents to a recent Kraft/CSP Daily News poll that asked, Should there be federal law that defines and bans price gouging at the pump?, 126 (55.3%) said no, while 102 (44.7%) said yes. Such a law moved one step closer to reality yesterday.
The U.S. Senate Commerce, Science & Transportation Committeeon Tuesdayapproved legislation introduced by Senator Maria Cantwell (D-Wash.) to make gasoline price gouging a federal crime and put in place new federal protections to guard against market manipulation by oil and gas companies. [image-nocss] The committee's approval of the bill, the Petroleum Consumer Price Gouging Protection Act, marks the first time the panel has passed this legislation and sent it on to the full Senate. Cantwell vowed to work to make sure the legislation is taken up by the full Senate as soon as possible.
At present, there are no federal laws on the books that address price gouging for oil and gasoline, although 28 states have laws similar to Cantwell's proposal, which is modeled primarily on a New York statute that has withstood court scrutiny.
Cantwell offered her legislation as an amendment to a fuel economy bill that she and Sen. Dianne Feinstein (D-Calif.) introduced in January. The Commerce Committee approved the Cantwell amendment, as well as the fuel economy bill, which would raise the combined nationwide average fuel economy standards for all SUVs, cars and small trucks from 25 to 35 miles per gallon by 2020.
Cantwell introduced her bipartisan gasoline price gouging legislation (S. 1263) last week, and offered it Tuesday as an amendment to the fuel economy bill (S. 357). Based on Cantwell's measures to ban Enron-style manipulation schemes in the electricity industry, her legislation would give the president the authority to declare national energy emergencies during which proven price gougers would be subject to new fines and criminal penalties.
Under the legislation, the Federal Trade Commission (FTC) could conduct investigations and fine companies for price gouging. The Department of Justice would enforce criminal penalties for gasoline price gouging during energy emergencies declared by the president. Energy emergencies could be declared during oil market disruptions, similar to those that followed Hurricane Katrina.
Cantwell first introduced her bill to ban gasoline price gouging in 2005. In November of that year, her legislation garnered 57 votes as an amendment to the Tax Reconciliation billincluding the votes of 13 Republicansbut it required 60 votes for passage at the time. It was cosponsored by one-third of the Senate, and endorsed by eight governors and nine attorneys general.
Following the passage of the legislation out of the committee, the Petroleum Marketers Association of America (PMAA) said in a statement that it agrees with the FTC that there is not significant evidence of gouging at any point along the fuel stream and such legislation will ultimately harm consumers and efforts to conserve. PMAA will continue to oppose all price control legislation.
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