Democrats aim to require FTC to investigate possible gas price gouging

Democrats have introduced legislation that aims to require the Federal Trade Commission (FTC) to investigate possible gas price manipulation, as polling shows rising fuel prices have become an issue for many consumers amid an increase in inflation.

Democratic Reps. Val Demings (Fla.), Jerry Nadler (N.Y.), David Cicilline (R.I.) and Kathy Castor (Fla.) unveiled the bill, dubbed the Oil and Gas Industry Antitrust Act, on early Thursday.

The measure seeks to require the FTC to investigate whether the price of gasoline is being “manipulated by reducing refinery capacity or by any other form of market manipulation or artificially increased by price gouging practices,” the bill text states.

The bill also states that, in conducting the probe, the FTC may “may consider the impact of mergers and acquisitions in the oil and gas industry, including mergers and acquisitions involving producers, refiners, transporters, and gas stations.”

The measure builds upon calls that have been made by Democrats and the White House in recent months, urging the FTC to probe whether oil companies have been raising prices illegally at a time when the nation is seeing decades-high inflation rates.

For many Americans, the often red or yellow climbing price stickers at the pump have emerged as one of the most painful pictures of costs rising across the board.

An ABC News-Ipsos poll released earlier this month found that nearly half of Americans, or 49 percent, said increases in gas prices have caused them or others in their household financial hardship.

The poll, conducted on April 8 and 9 with “a nationally representative probability sample of 530 adults,” also provided a glimpse into who Americans feel are responsible for rising gas prices.

Seventy-one percent of respondents surveyed blamed Russian President Vladimir Putin for the increases, compared to 68 percent of participants who blamed oil companies, 52 percent who blamed Democratic policies, 51 percent who blamed President Biden, and 32 percent who blamed Republican policies.

The poll comes as Republicans and Democrats have pointed fingers in different directions over the cause of higher gas prices.

As inflation emerges as a key campaign issue ahead of the pivotal midterm elections later this year, Republicans have blamed price hikes on Democratic-backed policies, namely the $1.9 trillion American Rescue Plan that Biden signed into law in March 2021.

But many Democrats have instead pointed at oil companies and corporations, citing reports showing corporate profits reaching all-time highs during the pandemic, while charging larger companies with capitalizing on economic conditions to punch up costs.

“When we turn on the news, we see record oil company profits side by side with high gas prices for Florida families. These high prices are caused not just by Putin’s war but also by corporate practices that put profits before working families,” Demings said in a statement on Thursday.

“We’ve seen it over and over: an emergency gives companies an excuse to spike their prices, then the emergency ends, and gas prices don’t go back down,” added Demings, who is also running to unseat Sen. Marco Rubio (R-Fla.) later this year.

“We cannot allow Big Oil CEOs to manipulate markets in order to make billions on the backs of struggling Americans by overcharging at the pump,” Castor, chair of the Select Committee on the Climate Crisis, also said in a statement. “Our legislation will help protect the pocketbooks of Americans by uncovering price gouging practices rooted in corporate greed, while also taking away the ability of oil and gas executives to profiteer during a time of crisis.”

But some oil companies have come out against such arguments that they are to blame for higher prices.

“We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging,” Chevron CEO Michael Wirth testified before Congress earlier this month, according to ABC News.

A congressional aide familiar with talks said the new bill said that, if passed, it would make it a congressional requirement for the FTC to probe potential gas price manipulation.

The FTC would not comment on the new legislation.

The aide compared the bill’s makeup to the Energy Policy Act of 2005 that called on the commission to investigate if gas prices had been “artificially manipulated by reducing refinery capacity or by any other form of market manipulation or price gouging practices.”

A subsequent report from the FTC detailing a probe into gasoline price manipulation and post-Hurricane Katrina gasoline price increases was released the following year and concluded that some price gouging by individual retailers occurred “to a limited extent.”

“Local or regional market trends, however, seemed to explain the price increases in all but one case,” the report also stated. “Exceptionally high prices on the part of individual retailers generally were very shortlived. Interviews with retailers that charged exceptionally high prices indicated that at least some were responding to station-level supply shortages and to imprecise and changing perceptions of market conditions.”

The aide said the those involved in the current legislative push plan to begin circulating the proposal with others in the weeks ahead to build momentum in the lower chamber, where Democrats hold a slim majority. But if approved, it’s unclear how the bill would fare in the 50-50 split Senate.

In efforts to secure its passage, the aide pointed to consideration of potentially attaching the proposal to a larger measure in the coming months, though they added offices involved haven’t closed off other avenues of passage.

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