House Approves Stiff Penalties For Gasoline Price Gouging

WASHINGTON (AP) _ Responding to high costs at the pump, the House approved legislation Wednesday that would outlaw gasoline price gouging. <br/><br/>Many lawmakers said that may be easier to say than to

Wednesday, May 23rd 2007, 4:02 pm

By: News On 6

WASHINGTON (AP) _ Responding to high costs at the pump, the House approved legislation Wednesday that would outlaw gasoline price gouging.

Many lawmakers said that may be easier to say than to detect or enforce.

The legislation would penalize individuals or companies for taking ``unfair advantage'' or charging ``unconscionably excessive'' prices for gasoline and other fuels.

Opponents said the language was too vague and that the Federal Trade Commission, which would enforce the law, has not clearly defined price gouging.

``I don't know what `unconscionably excessive' means,'' said Rep. Joe Barton, R-Texas.

The bill's chief sponsor, Democratic Rep. Bart Stupak of Michigan, said he had no doubt the FTC would be able to determine price gouging once the agency had a law to uphold.

The measure would establish the first federal law against energy price gouging. The FTC now can investigate price manipulation under antitrust laws. Currently, 29 states have price gouging statutes; enforcement varies widely.

Stupak's proposal only would go into effect _ and then for just 30 days _ if the president declared an energy emergency.

The bill calls for penalties of up to $150 million for companies and up to $2 million and 10 years imprisonment for individuals found to be engaged in price gouging.

Twenty-nine state have various price gouging statutes, but the vary widely in enforcement.

The FTC has investigated allegations of price manipulation but failed to find widespread violations. In a report last year, the agency said an investigation after Hurricane Katrina hit in 2005 uncovered 15 incidents that could have been price gouging. But other factors also could have explained the high prices, it said.

The House passed the legislation by a vote of 284-141 as majority Democrats pushed for action ahead of the Memorial Day weekend. Prices at a near-record levels heading into the holiday, the traditional kickoff for the summer driving season.

Senate Democrats said they would take up energy legislation _ including price gouging _ next month after they finish an immigration bill.

That energy measure would require that vehicles get better mileage and that 35 billion gallons of ethanol serve as a substitute for gasoline by 2022 _ a sevenfold increase over today's levels.

``Our legislation will dramatically increase American-made and grown renewable fuels production,'' said Senate Majority Leader Harry Reid, D-Nev.

House Speaker Nancy Pelosi, D-Calif., also has promised an ``energy independence'' proposal before July 4.

But lawmakers have acknowledged such measures will do little to ease the price crunch at the gas pumps. The House's decision to move ahead on the price gouging measure was viewed as giving lawmakers the chance to vote on gas prices before Congress leaves for a weeklong vacation.

``Vote to stand up for consumers,'' Stupak urged his colleagues. He said the vote offered a choice whether to ``side with Big Oil (or) ... with consumers who are being ripped off at the gas pump.''

Opponents, including the Bush administration, said the legislation was too vague and ``would amount to price controls and in some cases bring back long gas lines reminiscent of the 1970s.''

It ``would harm consumers, the very people the bill is touted to protect,'' the White House said in a statement to lawmakers.

Missouri Rep. Roy Blunt, the No. 2 House Republican, said the bill would mean ``undue hardship for ... people trying to make a living'' including mom and pop grocery or gasoline station owners.

Separately, two government economists disagreed at a Senate hearing Wednesday about whether oil mergers in the late 1990s may be relevant to today's surging prices.

Thomas McCool, an economist at the Government Accountability Office, said its examination of those mergers showed they raised oil prices by a penny to 7 cents a gallon.

But Michael A. Salinger, director of the FTC's bureau of economics, said the agency's investigations have turned up no evidence that the mergers have been a major factor in higher prices. He said today's prices resulted from increased demand, refinery snags and a recent drop in gasoline imports.