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Wyden, Fellow Democrats Call
for Safety Measures
to Protect Consumers Against Gas Price Gouging
September 14, 2005
WASHINGTON, DC – U.S. Senator
Ron Wyden (D-Ore.) today joined fellow Democratic leaders to fight
gas price gouging in the wake of Hurricane Katrina. Measures called
for today by U.S. Senator Maria Cantwell (D-Wash.), Wyden and
others would give the President the authority to declare a national
energy emergency and strengthen the hand of the Federal Trade
Commission (FTC) when fighting illegal price gouging that hits
Oregonians and all consumers hard at the pumps.
Before Hurricane Katrina, years
of market manipulation by oil companies artificially inflated
prices on the West Coast of the United States; Wyden has documented
both their anti-competitive practices and the Federal Trade Commission’s
refusal to act on consumers’ behalf. Following the devastating
impact of Hurricane Katrina, skyrocketing gas prices are having
an effect all across the economy, squeezing the budgets of American
families, hurting farmers and businesses alike.
“It’s taking the help
of all Americans to recover from Hurricane Katrina, from kids
with lemonade stands to families making donations and taking in
strangers – all we’re asking the oil industry to do
is not to gouge consumers, to stop manipulating the market as
they have for years,” said Senator Ron Wyden (D-OR). “If
the oil companies won’t step up in this time of crisis,
the FTC needs to step in, and Congress has a duty to make sure
that happens.”
Proposals discussed by the Senators
at a Washington press conference today include:
• Congress should create emergency
authority at FTC to investigate gasoline price gouging if the
President makes an emergency declaration in consultation with
the Energy Department and the Federal Trade Commission. Right
now this authority is only available in certain states that have
enacted anti-price gouging legislation.
• The FTC, an independent
regulatory commission, should conduct the investigation and would
be authorized to fine companies for price gouging versus the more
traditional remedies such as cease and desist orders and requiring
that companies disgorge profits after the fact. Definition of
price gouging would be done through FTC rulemaking. There should
be no preemption of state law.
• The FTC should create a
web site and toll free number so consumers could report price
gouging.
According to data from the federal
Energy Information Administration (EIA), national gasoline prices
have been averaging about $3.07 a gallon—or $1.22 higher
than last year, a more than 60 percent increase. In Oregon, gasoline
prices hit an all-time statewide high last Friday.
Earlier this month, the Congressional
Budget Office (CBO) also released a report on the projected economic
impacts of Hurricane Katrina. The CBO report found that a 40 percent
increase in prices during September could impact national GDP
during the third and fourth quarters of this year, and called
the spike in prices “a temporary redistribution of income
from consumers of gasoline to the stockholders of refiners”
– in other words, reporting that money is moving from consumers’
pockets to oil refiners’ profit margins.
For more information on Wyden’s
investigations of anti-competitive practices in the oil industry
in the years preceding Hurricane Katrina, visit http://wyden.senate.gov/leg_issues/issue/special.html
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