With the average consumer bearing the brunt of higher gas prices, the major oil and gas companies continued to make historic profits. Lawmakers are concerned about the stark contrast between industry profits and the consumer struggle that has been pushed – and passed through the US House of Representatives on Thursday – law Project It would make excessive price hikes illegal and expand federal authority to investigate alleged price gouging. The Law to prevent manipulation of fuel prices for consumers Aims to help mitigate rising gas prices; The average national gas price It was $4.45 per gallon Last week – a record high for the US. Some states, such as California, have seen gas prices Up to $6 per gallon.
This led to an unprecedented first quarter for oil and gas companies. According to an analysis by the monitoring group Accountable.US, the 21 largest companies in the country participated 41 billion dollars In earnings for the first quarter of this year – an average of $1.2 billion per company compared to the same period last year, the report noted. Companies like Devon Energy are so full of cash that they reward shareholders with “standard” payments. Certainly, Congress has noticed.
“I am a proud capitalist, and what we are seeing in fuel prices is the result of a broken market,” She said Representative Katie Porter, a California Democrat and one of the original sponsors of the Consumer Fuel Price Fugitive Prevention Act. Big oil executives brag to shareholders about families of price gouging at the pump. They are intentionally keeping supply low to earn record profits, putting pressure on families — and our entire economy — in the process.”
House lawmakers approved the bill by 217 votes to 207, with no Republican support. Four moderate Democrats — Representatives Lizzie Fletcher, Jared Golden, Stephanie Murphy and Kathleen Rice — bucked the party line and voted against the bill.
“The Consumer Fuel Price Fraud Prevention Act will not fix high gasoline prices at the pump, and it has the potential to exacerbate the supply shortages our country faces, with worse outcomes,” Fletcher books in the current situation. “For these reasons, I voted no on this legislation.”
Even some Democrats who eventually supported the legislation expressed concerns about the bill. “You know, it looks like we’re dealing with oil and gas like Big Tobacco, and sometimes they’re being unfairly targeted,” he said. She said Representative Vicente Gonzalez of Texas.
In addition to a veto from the four Democrats and widespread Republican opposition, the legislation received opposition from powerful industry lobby groups, including the American Petroleum Institute and the National Association of Manufacturers.
With oil and gas companies resisting regulations and virtually no Republican support, a fuel price gouging bill could face an uphill battle in the Senate, where Democrats have a slim majority.
What does a fuel price gouging bill really do?
The Consumer Fuel Price Gouging Prevention Act has a few key components: First, the legislation would allow the president to declare an energy emergency in effect for up to 30 days, although that declaration could be renewed.
During an energy emergency, it becomes illegal for anyone to sell consumer fuels at an “unreasonably excessive” price or indicate exploitative practices. The bill would also expand the authority of the Federal Trade Commission to investigate and address potential cases of fuel price gouging by large corporations, defined as businesses amounting to $500 million in annual wholesale or retail sales in the United States. Under the bill, state authorities would be given enforcement powers against fuel price violations through civil court proceedings.
The legislation aims to tackle record-high gas prices in the United States, which some lawmakers and regulators claim are largely made by oil and gas companies. Like other commodities in the market, the cost of a gallon of gas is affected by supply and demand in the market. Major events such as the COVID-19 crisis, the Russian invasion of Ukraine, and a disrupted supply chain can affect the supply and demand of some commodities in the market.
However, what remains a matter of debate is the extent to which the price of certain commodities is affected when the variables in the market change. there There is no legal definition For what exactly constitutes price gouging in the US. Oil and gas companies such as Chevron and Shell may benefit from market instability by raising gas prices excessively while limiting production to increase profits, which in turn harms consumers.
It’s hard to know how much of an increase in oil and gas production — demanded by lawmakers like Rep. Porter — would be enough to ease current fears of price gouging, or even if it would help tackle the gas crisis at all. Yet Republicans believe that targeting the industry is not a viable solution, but increasing domestic production is the way to ease the pain at the pump. But GOP lawmakers likely won’t get their wish for a number of reasons, including resistance from oil and gas companies. a survey A Dallas Fed survey in March found that many companies do not expect production to increase any time soon. The Federal Reserve Bank of Dallas covers the 11th Federal Reserve District, including oil-producing states such as Texas and New Mexico.
On average, the Dallas Federal Reserve survey found that oil and gas companies operating in the region expect crude oil prices to reach $93 a barrel by the end of the year, while some have forecast prices as high as $200 a barrel. At the time of the survey in March, the price of crude oil was at $100 a barrel. Nearly 60% of companies that participated in the survey cited “investor pressure to maintain capital discipline” as the main reason why oil companies are not drilling more despite rising gas prices. Naturally, lawmakers would notice.
Price gouging is anti-capitalist. The oil majors are threatening our entire economy by keeping supply low and raising prices at the pump beyond the rate of inflation to please Wall Street.
Oil and gas company executives *literally* admit it. (string ⬇️) pic.twitter.com/HosywUxU8Y
Representative Katie Porter (@RepKatiePorter) May 19, 2022
POLL RESULTS: Poll results, Porter wrote in a tweet before the House passed the Fuel Price Gouging Act. “Oil and gas company executives *admit it literally*.”
Analysts believe that the best indicator of inflation is the Consumer Price Index (CPI), which mainly measures changes in the prices of goods and services that ordinary consumers buy frequently. The Bureau of Labor Statistics found that the Consumer Price Index rose 8.3% over the past 12 months ending in April. Of all the categories included in the CPI measurement, fuel oil prices were more By far the most, having jumped more than 80% in the past 12 months.
But high rates of inflation are not only affecting gas prices – the housing market, as well as food and groceries, has seen a sharp rise in prices as well. The multiplier effect can have a huge impact on the average American, in particular low income families With limited transportation options and who are already working on a tight home budget.
This inflation is a real problem. When you pay double to fill up your tank and twice for everything, you have to say to yourself, “Well, do I really need to buy everything at King’s?” [Food Market]? One shopper, now dividing her shopping among several stores to get the cheapest prices, Tell New York times.
Will the fuel price gouging bill really make a difference?
Opponents of the bill argue that price gouging is already illegal in most states, making the legislation moot. Instead, they believe lawmakers should focus on increasing domestic energy production and improving the country’s competitive advantage in the global market. American Petroleum Institute call The bill is “misleading” and Named It’s an empty attempt by Democrats to sway voters ahead of the November midterm elections. Other industry groups feel similarly with many Republicans, who claim their concerns are about domestic production and energy security.
“[Combatting price-gouging] It starts with unlocking our diverse resources on federal lands, approving responsible exploration and production, supporting sustainable permits, and building more energy infrastructure quickly,” Rachel Jones, vice president for energy and resource policy at the National Association of Manufacturers, books In a letter to the leadership of the House of Representatives in response to the bill.
According to AAA, the main factor driving high gas prices across the country is the tight supply of oil versus market demand.
Andrew Gross, a company spokesperson, said in a statement: statment. “Even the lower annual seasonal demand for gasoline during the lull between Spring Break and Memorial Day, which would normally help bring prices down, has no effect this year.”
Supporters of the bill assert that corporate profiteering by oil and gas companies inherently exacerbates gas prices. But there is little consensus among experts about the effectiveness of the fuel price gouging law. Some believe that it may have a negative impact on the market.
“There is no material possibility, in any permanent way, that disingenuous legislation could have any material effect on inflationary pressure,” Lawrence Summers, former Treasury Secretary under the Clinton administration, Tell Bloomberg TV in an interview last week. He added that there was a possibility that such legislation could “cause and orchestrate all kinds of shortages” and undermine companies’ moves to increase supply.
Arguments about whether the fuel price gouging law is an effective enough solution to high gas prices in the US may be down the drain if the law isn’t passed by the Senate, where Democrats are. unable to pass Important legislative provisions in the past have often failed to reach the 60-vote threshold needed to end the disruption and move forward with legislation.
But that may not be the last we hear about anti-price gouging legislation as lawmakers try to find ways to combat deflation. Earlier this month, President Joe Biden call The Federal Trade Commission and state attorneys general to crack down on price gouging as part of the administration’s efforts There is a shortage of infant formula in the country, following reports of unfair practices by individual distributors. He could follow suit for oil and gas, too.
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