WASHINGTON — The House, eager to do something about record high gasoline prices in advance of the Memorial Day weekend, voted narrowly Wednesday to approve stiff penalties for those found guilty of gasoline price gouging.
The bill directs the Federal Trade Commission and Justice Department to go after oil companies, traders or retail operators if they take “unfair advantage” or charge “unconscionably excessive” prices for gasoline and other fuels.
The White House called the measure a form of price controls that could result in fuel shortages. It said President Bush would be urged to veto the legislation should it pass Congress.
The bill needed the approval of two-thirds of the members of the House because the leadership considered it under an expedited legislative process. Thus, the 284-141 vote was only one over the threshold for passage. A similar measure is being considered by the Senate.
The bill would for the first time create a federal law making energy price gouging illegal. It would cover not only gasoline, but also other fuels such as natural gas and heating oil.
Rep. Bart Stupak, D-Mich., its chief sponsor, in urging his colleagues to support the bill said the issue was whether “to side with Big Oil (or) ... side with consumers who are being ripped off at the gas pump.”
But Stupak was forced to soften the bill so that he could get it passed by requiring a president to first declare an energy emergency before the anti-gouging law could be enforced. Oil-state Democrats had wanted such limits.
The bill calls for criminal penalties of up to $150 million for corporations and up to $2 million and a jail sentence of up to 10 years for individuals found to be engaged in price gouging.
Opponents said the legislation was too vague and amounts to price controls.
“I don’t know what ‘unconscionably excessive’ means,” Rep. Joe Barton, R-Texas, complained, referring to a phrase that would trigger a price gouging prosecution.
Barton said today’s high gasoline prices are the result of supply and demand and not price gouging. “Demand has gone up and supply has not gone up. ... and the price has gone up,” said Barton.
The White House said the administration “strongly opposes” the bill and the president would be urged to veto it if it passes Congress.
It “would harm consumers, the very people the bill is touted to protect,” said a White House statement to lawmakers. It said price gouging legislation would amount to “price controls and in some cases bring back long gas lines reminiscent of the 1970s.”
Oil company lobbyists have argued that when there are tight markets and rising prices, the vague gouging definition would inhibit refiners and retailers from adding supplies for fear of being taken to court.
“Mom-and-pop grocer and gasoline station owners can’t wonder what every court is going to decide,” said Rep. Roy Blunt, R-Mo., the minority whip. He said the law would create “undue hardship for ... people trying to make a living.”
But the bill’s supporters argued that states can’t combat energy price gouging, leaving motorists at the whim of arbitrary oil company pricing. Twenty-nine states currently have energy price-gouging laws, but they vary in detail and under in terms of what conditions would trigger them.
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