Have no fear, summertime drivers. Now that gasoline prices are hovering at a national average of $3.22 per gallon, Congress is ready to pounce on oil companies that allegedly charge you more than you should be paying at the pump.
Earlier this week, the House of Representatives passed a bill that would impose fines of up to $150 million for oil companies that are found guilty of price gouging. The Senate will take up a similar measure after the Memorial Day recess.
Wait--haven't we seen this before? Yep.
During the last two decades, dozens of bills have been introduced that would freeze gas prices, prevent price gouging or punish oil and natural gas companies that engage in this behavior. Many of them have followed natural disasters when gas supplies are short. For example, there were at least 20 following Hurricanes Katrina and Rita in 2005.
It's impossible to pinpoint a specific number of these bills--many of them obliquely reference price gouging or get folded into larger legislative packages. But according to the Library of Congress, most of them have been introduced within the last five years. Among the most memorable:
--G.O.U.G.E. Act of 2005. The Gross Overcharging Undermines Gasoline Economics Act would have assessed fines of up to $25,000 on gas retailers that charged far in excess of the index price for gasoline.
--"Got Gas?" Act of 2000. A riff on the popular "Got Milk?" ad slogan, the "Got Gas?" Act was designed to reimburse consumers for allegedly illegal practices by petroleum industry participants in the Midwest.
--Special Prosecutor. A House bill introduced in 1990 that would have required the president to tap into the Strategic Petroleum Reserve during an emergency shortage would also have established the appointment of a special investigator to uncover possible gouging and market manipulation by oil companies.
--The Oil Consumer Justice Act of 1990. Designed to establish a fund for victims of oil price gouging.
--Sept. 11 Condemnation. A House resolution introduced in the days after Sept. 11, 2001, condemned oil price gouging after gas prices in some parts of the country rose by as much as 300% after the terrorist attacks.
None of these measures became law, at least on their own. (The last, a resolution, was never intended to become law). In fact, there is no federal law in place to punish oil companies because gas prices are too high. It doesn't matter. Fixing prices on anything--from gas to soda--is already illegal. So how many oil companies have been prosecuted for these alleged offenses under existing laws? None.
The White House has indicated that President Bush will veto any attempt to establish gasoline price gouging legislation. And in testimony before Congress earlier this week, Federal Trade Commission Chairwoman Deborah Platt Majoras warned about trying to legislate the petroleum market.
"If supply responses and the market-clearing price are not considered, wholesalers and retailers will run out of gasoline and consumers will be worse off," she says. Majoras adds that "the commission cannot say that federal price gouging legislation would produce a net benefit for consumers."
Red Cavaney, chief executive of the American Petroleum Institute, an industry organization that counts BP (nyse: BP - news - people ), ConocoPhillips (nyse: COP - news - people ) and Exxon Mobil (nyse: XOM - news - people ) among its members, says, "The legislation is a cousin of the disastrous 1970s price and allocation controls, which created product shortages and put consumers in gasoline lines."
So if history shows that proposed anti-price-gouging legislation has fallen flat on its face, and if two federal agencies have said they haven't found any evidence of price gouging by oil and natural gas companies, and no one has been prosecuted under existing laws for price fixing, then why the new legislation?
"No. 1, Democrats are in charge of both chambers," says Rep. Bart Stupak, D-Mich., the sponsor of the bill that recently cleared the House. He says that consumers are aware that gas prices have soared "without a major event driving it" and that he feels there is enough support in the Senate to send it to the president.
And the threat of a veto? "We take it with a grain of salt," Stupak says, adding that Democratic lawmakers will find a larger piece of legislation to attach the bill to if necessary.
FORBES
by Brian Wingfield
