Gas prices
David Zalubowski  /  AP
Gasoline prices have jumped by as much as 8 cents over the past week in the Denver area — more in other areas of the country.
updated 3/1/2007 9:42:24 AM ET 2007-03-01T14:42:24

Although gasoline prices have dropped sharply from last summer, 79 lawmakers sought to send a message Wednesday, introducing a bill that would impose stiff penalties on oil and gas companies for price gouging.

With prices at the pump rebounding in recent weeks, Rep. Bart Stupak, D-Mich., said he's worried "this summer prices may once again exceed $3 a gallon."

The bill introduced by Stupak and 78 other members of the House would establish the first federal law against price gouging by oil and gas companies, imposing criminal penalties and fines of up to $150 million for corporations and $2 million on individuals.

The House passed a similar bill last year, but it died in the Senate.

The Federal Trade Commission would be given authority to investigate price gouging in the sale of crude oil, home heating oil, propane and natural gas.

"The FTC has never brought a gas price gouging case to court," said Stupak.

In fact, the agency has no authority to do so since there is no federal energy price gouging law. FTC investigations into crude oil or gasoline pricing have focused on whether companies have colluded in violation of antitrust laws.

Last year, FTC Chairwoman Deborah Platt Majoras said a federal law against oil company price gouging would be difficult to enforce and could hurt consumers by causing fuel shortages.

She said price gouging is difficult to define and courts have refused to address the question of what is a "reasonable" price in a free market. She maintained it may be difficult to determine what price hikes are legitimate.

Twenty-nine states have price gouging statutes, but they vary widely and some go into effect only in an emergency.

Retail gasoline prices have increased 13 cents a gallon on average nationwide in the past two weeks as the price of crude oil also has been rising. The oil industry has repeatedly disputed allegations of price gouging, saying prices at the pump reflect supply and demand, and mostly the cost of crude oil.

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