Congress Outlaws Gasoline Price Gouging

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The New York Sun

WASHINGTON – The House approved criminal penalties and fines of up to $150 million yesterday for energy companies caught price gouging as lawmakers responded to public anger over high gasoline prices and huge oil industry profits.


The legislation, receiving broad bipartisan support, passed 389-34, and must now be considered by the Senate.


But a proposal aimed at making it easier to expand or build refineries fell short 237-188. It needed two-thirds approval to pass under special House procedures.


Democrats said the speed-up in permits might reduce environmental protection and usurp local say over refinery construction.


President Bush, after meeting for more than an hour with more than a dozen Republican and Democratic members of Congress, said it was important “to make sure our consumers are treated fairly” by the oil markets.


“The price of gasoline should serve as a wakeup call … that we’ve got an energy security problem,” Mr. Bush said after the meeting.


The White House has not given a position on the House-passed gouging legislation. While Democrats voiced support for the bill, some criticized the president for saying last week that he did not believe there has been gouging by oil companies.


“The American people are quite fed up….They know gouging when they see it and they’re being gouged,” said Rep. Bart Stupak, a Democrat of Michigan.


Rep. Heather Wilson, a Republican of New Mexico, chief sponsor of the legislation that for the first time would create a federal law on energy price gouging, said, “This is one thing we have to do.”


Supporters of the refinery bill said delays in permitting have kept industry from building new refineries. Opponents, however, argued the bill would reduce environmental protection.


Rep. Rick Boucher, a Democrat of Virginia., said slow permitting is not preventing refinery construction.


“The real reason we have a refinery shortage is the companies that own refineries are profiting enormously from the refinery bottlenecks,” said Mr. Boucher.


The gouging legislation calls for penalties of up to $150 million for refiners and other wholesalers and $2 million for retailers. It covers marketers of gasoline, diesel fuel, crude oil, and heating fuel. Wholesalers and retail outlets such as corner gas stations and service station chains face penalties triple the amount of their unfair profit.


The measure also calls on the Federal Trade Commission to develop a definition of price gouging and pursue civil penalties if violations occur. Criminal prosecution would be up to the Justice Department and states.


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