😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

U.S. Democrats to 'go after' oil companies over gasoline prices

Published 04/28/2022, 10:20 AM
Updated 04/28/2022, 01:01 PM
© Reuters. FILE PHOTO: Pedestrians walk by the United States Capitol building in Washington, U.S. March 15, 2022. REUTERS/Emily Elconin/File Photo

By Richard Cowan and Diane Bartz

WASHINGTON (Reuters) -Democrats in Congress, accusing oil companies of gouging and profiteering that has raised gasoline prices, on Thursday promised legislation to allow the U.S. Federal Trade Commission and state attorneys general to go after them.

"It would give the FTC and the state AG's increased authority, including civil penalty authority, to go after oil companies and retailers that are gouging their customers and would cover both wholesale and retail sales," House Energy and Commerce Committee Chairman Frank Pallone told reporters.

With opinion polls showing Americans concerned about high prices for energy, food and other consumer goods, Senate Democratic Majority Leader Chuck Schumer said legislation to lower retail gasoline prices "is at the very top of our list."

House of Representatives Speaker Nancy Pelosi, also a Democrat, said lowering the price of gasoline at the pump would have the ripple effect of easing rising prices on other goods because of transportation costs.

With congressional elections six months away, Republicans are anchoring their bid to seize majority control of the House and Senate by blaming President Joe Biden and his fellow Democrats in Congress for spending so much money addressing the COVID-19 pandemic and bolstering the economy that it ignited inflation.

Retail gasoline prices in the United States are now around $4.20 per gallon, up from about $2.96 a year ago. The oil industry says price rises are not arbitrary but determined by market forces.

Neither Schumer nor Pelosi would say when such legislation will be voted upon or how much money it could end up saving consumers if enacted into law.

"Big Oil has profiteered and exploited the marketplace," Pelosi told reporters, citing companies' strong corporate profits over the past year. "They are hoarding the windfall while keeping prices high at the pump," she added.

The FTC already has the power to take action against those who manipulate wholesale oil markets by making it illegal to report false information to inflate prices.

Legislation now being drafted by Senate and House committees would double the penalty for manipulating these markets to $2 million per day per violation.

According to a draft of the legislation, the FTC could enforce similar rules in retail markets and include biofuels. It would create a new FTC unit to monitor and analyze the prices of crude oil, gasoline, diesel, home heating oil and others.

The FTC declined to comment on the evolving legislation.

The agency is regularly asked to probe gasoline prices at times when consumers are paying more at the pump and regularly reports that it has found no wrongdoing, said Henry Su, a veteran of the FTC now at the law firm Bradley Arant Boult Cummings LLP.

Once legislation is sent to the full House and Senate for debate and votes, it is unclear whether Democrats will be able to attract enough Republican support for passage, especially in the Senate where the chamber is divided 50-50 by party and Democratic Vice President Kamala Harris at times casts tie-breaking votes.

Most legislation needs at least 60 votes to clear Senate procedural hurdles, unless Democrats employ a difficult "reconciliation" strategy allowing some measures to pass by simple majority vote.

Noticeably absent from Schumer and Pelosi's attack on gasoline prices was any effort to suspend the federal gasoline tax or give consumers vouchers to help them pay for the fuel.

As domestic fuel prices have risen, especially after Russia's Feb. 24 assault on Ukraine, Democrats have tried to place the blame on two international actors: Russian President Vladimir Putin for the war that has resulted in supply disruptions and sanctions against Moscow linked to some price increases and an oil industry it accuses of tamping down production while enriching investors through stock buybacks.

© Reuters. FILE PHOTO: Pedestrians walk by the United States Capitol building in Washington, U.S. March 15, 2022. REUTERS/Emily Elconin/File Photo

On Thursday, Schumer called the major oil companies "vultures."

The oil industry's American Petroleum Institute on its website ascribes higher prices to a global supply crunch, workforce constraints, instability in Eastern Europe and an economic rebound as the United States emerges from the effects of the coronavirus pandemic.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.