The House of Representatives this week is expected to vote on legislation that is designed to combat price gouging specifically in the market for motor fuels. The legislation appears to be far more about politics than substance, and is unlikely to make it through the Senate and become law.
The legislation was designed by policymakers to focus primarily on the refining sector, but is drafted in a way that could capture more downstream actors as well. The bill would make it unlawful to charge a price for motor fuel, at wholesale or retail, that is "unconscionably excessive" and "indicates the seller is exploiting the circumstances related to an energy emergency to increase prices unreasonably."
Whether the amount charged by a seller "grossly exceeds" either the average price that the seller had previously been charging or the amount that the same fuel is available in the same area from other sellers indicates that the price is "unconscionably excessive."
The bill explicitly states that fuel marketers can defend against accusations of price gouging by pointing to an increase in fuel sold during the period in question, or by demonstrating that the increase in the price of fuel reflects additional costs paid, incurred, or "reasonably anticipated" by the marketer, or "reasonably reflects" additional risks taken by such person to market the fuel.
NATSO, along with other industry trade groups, will be sending a letter today to Capitol Hill opposing the legislation. "Most states already have laws prohibiting price gouging," the letter states. "We all oppose gouging which harms the industry as a whole. That said, actual gouging at retail is very rare. Gouging is simply not a characteristic or driving force of the retail market prices we see today." The letter also notes that credit card fees rise to exorbitant levels when fuel prices increase, and that these predatory practices by the card companies exacerbate existing inflationary pressures on fuel prices.
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