LoBiondo Introduces Legislation Intended to Prosecute Price-Gougers
October 27, 2005
"Consumers should have the right to know that the fuel prices they are struggling to pay are legitimate and that no one is profiting unjustly at their expense"
WASHINGTON, D.C. - U.S. Representative Frank A. LoBiondo (NJ-02) introduced legislation late last week that intends to seek out and bring charges against those suspected of price-gouging. The "Energy Price Discipline Act of 2005" (H.R. 4114) empowers the Federal Trade Commission (FTC) to investigate and, if necessary, fully prosecute refiners, distributors, or retailers of crude oil, gasoline, diesel fuel, natural gas or petroleum distillates who are suspected of manipulating the market price for unsubstantiated reasons.
"As Americans are made to dig deeper into their wallets to put gas in their cars and to heat their homes, oil companies and domestic refineries are already posting record profits this year. Consumers should have the right to know that the fuel prices they are struggling to pay are legitimate and that no one is profiting unjustly at their expense," said Congressman LoBiondo. "The Energy Price Discipline Act of 2005 will give the FTC the authority it needs to vigorously investigate and prosecute suspected price-gougers at every level of the supply chain."
Under LoBiondo's legislation, the FTC will use specific factors to determine whether the price of crude oil, gasoline, diesel fuel, natural gas, or petroleum distillates - regardless of where it is being sold - is "unjust or unreasonable," and, if determined to be as such, would therefore be considered "price gouging." These factors include:
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Additionally, LoBiondo's legislation allows the FTC to pursue price-gouging investigations without there being a federal emergency declaration for the region. Due to Hurricanes Katrina and Rita, a federal emergency declaration was declared for the Gulf Coast which permitted states to investigate and sanction suspected price-gougers in that region. However, due to the disruption in the supply chain, sharp increases in fuel prices were felt across the nation, leaving consumers in New Jersey vulnerable to potential price-gouging and the state powerless to prosecute offenders. The "Energy Price Discipline Act of 2005" corrects this short-coming.
"Today, Americans across the country are facing unprecedented energy costs. It is long overdue that federal authorities have the ability to subject those who engage in price-gouging to strong civil and criminal penalties. It is Congress' duty to serve the American people and ensure that no person or corporation is illegally profiting at consumers' expense, and we must answer that call to duty," concluded LoBiondo.
The legislation would impose strong civil ($11,000 per violation) and criminal (up to $100,000,000 for corporations and up to $1,000,000 for individuals, with up to 10 years imprisonment) penalties for entities convicted of federal price-gouging.