House OKs Energy Price-Gouging Punishment

[Phlegm]

From Associated Press:

(AP) The House on Wednesday approved criminal penalties and fines of up to $150 million for energy companies caught price gouging, yet lawmakers acknowledged there is no quick and easy fix to higher pump prices.

President Bush summoned Democrats and Republicans to the White House to discuss legislation to address long-term energy concerns.

"The price of gasoline should serve as a wake-up call ... that we've got an energy security problem and a national security problem and now is the time to deal with it in a forceful way," Bush said after the meeting.

With bipartisan support, the House approved on a 389-34 vote a measure that would create a price-gouging law and permit large fines and jail time for violators.

The Senate has yet to consider the legislation.

The House did reject a Republican bill that supporters said would make it easier to build refineries in hopes of easing tight gasoline supplies.

All but 13 Democrats opposed the measure, intended to quicken the permitting process. They said it would not bring down gas prices, could lessen environmental protection and usurp local say where refineries go.

Rep. Rick Boucher, D-Va., said the problem was not a delay in permitting.

"The real reason we have a refinery shortage is the companies that own refineries are profiting enormously from the ... refinery bottlenecks," he said.

Republicans branded Democrats as obstructionists on energy. The vote, 237-188, fell short of the two-thirds needed to pass under special procedures.

Rep. Joe Barton, R-Texas, a leading supporter of the refinery bill, promised to bring it back, possibly next week, under rules that require a simple majority for approval.

"There is not a panacea of short-term solutions to the (gasoline) price situation today because it's a demand-driven price," Barton said. said at a news conference.

He said the government could set price controls or release large amounts of oil from the U.S. emergency reserve. But he opposes both ideas and said they would cause other problems.

Senate Majority Leader Bill Frist's proposal to give people a $100 rebate checks was all but abandoned Wednesday, ridiculed even by members of his own party as insulting and inadequate.

Also seeming to lose steam was a Democratic proposal for a 60-day "holiday" from the 18.4-cent per gallon federal tax on gasoline.

"We would like to be able to do something now, quickly. The truth of the matter is we can't," Sen. Pete Domenici, chairman of the Senate Energy and Natural Resources Committee, told reporters after the White House meeting.

The price-gouging issue seemed to have the most potential as a congressional show of support for people angered by high gas prices.

Under Rep. Heather Wilson's bill, the Federal Trade Commission and Justice Department would have power over energy price gouging. "This is something we have to do," said Wilson, R-N.M.

During House debate, Rep. Sherwood Boehlert, R-N.Y., said, "American consumers are demanding protection from price gouging."

Democrats echoed that sentiment.

"The American people are quite fed up. ... They know gouging when they see it and they're being gouged," said Rep. Bart Stupak, D-Mich.

The legislation would direct the FTC to define price gouging. Violators could face penalties of up to $150 million for refiners and other wholesalers and $2 million for retailers. The measure would cover marketers of gasoline, diesel fuel, crude oil and heating fuel.

Wholesalers and retail outlets such as corner gas stations and service station chains could face civil penalties triple the amount of their unfair profit. Violators could go to jail.

Bush said last week he did not think oil companies were engaging in price gouging. He said Wednesday there is a "need to make sure our consumers are treated fairly _ that there is fairness in the marketplace."

The president, in talks with lawmakers, discussed proposals aimed at increasing and diversifying energy supplies, extending tax credits for the purchase of hybrid cars and encouraging alternative fuels.

"I don't think there were any new proposals that had not been kicked around, tried, talked about before," said Domenici, R-N.M.

Also Wednesday, the House Energy and Commerce Committee heard about the administration's request for new rules for auto mileage requirements. Automakers would gain flexibility in meeting per-gallon standards for cars, but overall mileage would not necessarily rise.

Barton, the committee's chairman, said he does not see Congress ordering higher mileage requirements. "A Draconian increase would be a stake in the heart ... of the auto industry in this country," he told reporters.

[Martrae]

How stupid

[dammuzis]

the gas station make very little profit.. thats why they all have quickie marts

its not too much if you still drive a hummer to soccer

[Tikker]

eh, i thought you right wing wingnuts were all about capitolism and free markets

[Yamori]

I can't wait to see what their precise numerical definition of price-gouging is.


HINT: It's probably "whatever we subjectively feel like it is, to be applied to whoever we want it to be."

[Lyion]

The problem is more one of Anti Trust than price gouging. This is a kneejerk political reaction that accomplishes nothing.

How about first recouping the 2 Billion in tax breaks and using that to offset the pump tax for the interim?

[Eziekial]

How about stopping our foreign policy of interventionism and allow free markets to set the price of fuel at what the market will bear?
Cut federal spending on foriegn aid including the IMF, MCA, NED and UN. Take that money use it to lower taxes. While we are at it, eliminate all federal subsides to oil corporations, farmers and power companies. Deregulate all the above and let the chips fall where they may.

[ClakarEQ]

I'll be shocked if anyone actually gets subjected to this "law". This was a vapor-ware hip-shot to please the stupid people in the US (you know the majortiy of people are complete dumb-fucks).

I think they shouldn't do shit. They should let pricing SOAR as high as it can go. We are not nearly as pissed off as we need to be.

[Martrae]

The true price gouger is the government. 35-55 cents per gallon goes to taxes already.

[Minrott]

Zeek move here and I'll campaign for you, fuck florida

[Lyion]

The true price gouger is the government. 35-55 cents per gallon goes to taxes already.

35 cents out of 3 bucks isn't exactly a majority.

The problem is the speculators are in bed with big oil and have ratched up the price based on 'potential' future problems.

Its bullshit. There is more supply than demand. The supply is actually getting bigger, instead of smaller. The bottom line is this is a handful of companies with no competition selling their product for 5 times what it cost to get it. This would be ok on a free market, but oil is the most closed market we have, and unfortunately is essential.

If Oil wants to play like they have no choice, then eminent domain their asses and have the government completely control it during our wartime efforts, and sell it at a real 8% mark up, which would be under 25 dollars a barrel.

[Martrae]

It's the most profit, however.

[Narrock]

I distinctly remember when gas was 54-cents a gallon. True story.

[Lyion]

It's the most profit, however.

15 dollars a barrel. Sell for 70+ dollars. You do the math.

[Eziekial]

What's the government's cost? So that makes the return on their investment? What? Infinity?

[Lyion]

What's the government's cost? So that makes the return on their investment? What? Infinity?

Not really a good return on investment. Note, this is in the red.

[Eziekial]

You know what's even more mind numbing than that number? It only represents what the government has spent and NOT collected taxes from us (yet). Talk about a shopping problem. The government has not nor will they EVER make that money. All they do it take it from those who have or will. Lovely, isn't it. ... where is the puking emoticon when you need it.

[Martrae]

March 6, 2006 breakdown on gas costs for California

Distribution Costs, Marketing Costs and Profits $0.03
Crude Oil Cost $1.43
Refinery Cost and Profits $0.47
State and Local Sales Tax $0.18
State Excise Tax $0.18
Federal Excise Tax $0.18
Retail prices $2.48

Taxes were .54 per gallon....that's more than it costs to refine the crude.

Refinery Cost and Profits includes all non-crude oil costs associated with refining and terminal operation, crude oil processing, oxygenate additives, product shipment and storage, oil spill fees, depreciation, purchases of gasoline to cover refinery shortages, brand advertising and profits. The component is calculated as the difference between the Oil Price Information Service (OPIS) average rack price of gasoline and crude oil cost.

[Lyion]

You are still missing the point, Mart.

It costs under 20 dollars to bring a barrel of Oil to market.

The companies are currently selling for over 70 dollars.

Your breakdowns are irrelevent, inaccurate, and do not represent the actual costs and revenues associated, but merely a birds eye view for the uninformed.

[Martrae]

If you say so....

[Lyion]

Supply is not oustripping demand.

We are not short of refining capability.

The taxes have not changed.

All the companies are charging nearly identical prices.. The definition of collusion.

Explain to me why we are paying 3 times what we should for a gallon of gas, and how its not collusion?

[Martrae]

Collusion indicates they are getting together and setting prices.

If I'm selling something and I set my prices at the same price as my competitor I'm just selling at market value.

[Sorina S]

Collusion indicates they are getting together and setting prices.

If I'm selling something and I set my prices at the same price as my competitor I'm just selling at market value.

Unless of course you were campin out with em at Bohemian Grove last month and you all swore on the flaming effigy that this would be the price. In which case you were just setting market value ^,~

No worries. I'm sure they're all an honest lot. If ya can't trust big oil, who can ya trust? Government? Nightly News? Oprah? Gotta trust somebody sometime.

SS~

[Lyion]

Collusion does not indicate actual interaction. If there is no competition and antitrust is evident, as it is in the case of big oil then it doesn't matter

We aren't talking about selling socks. This is a critical component of our country that is limited to a few players who can easily do whatever they choose.

If there isn't a supply issue, and demand doesn't indicate a need to raise.. Then gas prices shouldn't be 5 times what they cost to get in a free market economy. This is a clear sign of gouging by speculators and unfair antitrust actions by big oil.

[Sorina S]

WHOA, that's a bold statement Lyion. True though it may be.