US House passes fuel price gouging bill

Democrats in the US House of Representatives have passed a bill making it unlawful for companies to charge "unconscionably excessive" prices for fuel, as the party struggles to contain voter frustration over high pump prices.

The bill passed today in a 217-207 vote, giving Democrats a chance to advance their claim that "price gouging" by oil companies is at least partially responsible for a spiking fuel prices across the US. Republicans were united in voting against the bill, joined by four Democrats.

The US Federal Trade Commission (FTC) would gain authority under the bill to investigate if price gouging is taking place whenever the US president declared an "energy emergency." The FTC would also gain power to collect data on spot fuel trades to look for price manipulation.

But the bill has almost no chance of final passage in the US Senate because it would need the support of at least 10 Republicans to break a filibuster. Republicans have been united in opposing the bill, which they say could lead to investigations of "mom and pop" fuel stations. Republicans have pinned higher fuel prices on President Joe Biden's energy policies, such as canceling oil and gas lease sales on federal land.

"It is another week and another bill to try to divert attention away from what Joe Biden himself did to raise gas prices to the point where families cannot even afford to drive to work," House Republican whip Steve Scalise (R-Louisiana) said.

US retail regular gasoline have climbed by about $1/USG since mid-February while diesel has surged by nearly $1.60/USG, according to the US Energy Information Administration, as Russia's invasion of Ukraine crimped global fuel supplies and caused crude prices to spike. The price spikes in the US have contributed to a 40-year high in inflation and higher costs for travel, airfare, consumer goods, food and other parts of the economy.

Democrats earlier this year considered lifting a 18.4¢/USG federal excise tax on gasoline as a way to ease fuel costs. But party leaders dropped the idea because of concerns it would not be passed along to drivers while blowing a multibillion-dollar hole in highway budgets. Democrats say there should be more scrutiny on oil companies reporting billions of dollars in quarterly profits, at the same time they are charging higher prices.

"What is the harm in giving the FTC this additional authority so they can look and investigate and determine whether price gouging has existed?" House Energy and Commerce Committee chairman Frank Pallone (D-New Jersey) said during floor debate.

Oil industry groups oppose the bill. They argue the rise in fuel prices reflect market fundamentals such as higher demand and a loss of refining capacity. US refinery group American Fuels & Petrochemical Manufacturers said ambiguity over when a price would be "excessive" might cause traders to decide to sell fuel into foreign markets, where there would not be a risk of a potential FTC enforcement action, resulting in even higher prices in the US.

The initial version of the House bill focused on price gouging. But Democrats earlier this week tacked on legislative language from Senate Democrats that would direct the FTC to look for "suspicious behavior" and anti-competitive conduct in the buying and selling of crude, gasoline, diesel and other consumer fuels. The bill would double the FTC's civil penalty authority to up to $2mn/d for fuel price manipulation.

Senate majority leader Chuck Schumer (D-New York) intends to hold a vote on the fuel price bill on the Senate floor, but has yet to provide a specific timeline for the vote.

By Chris Knight