The Democrats, desperate to distract attention from the fact that they have no energy policy, have dredged up an old favorite–price gouging! Today they took out of mothballs the “Federal Price Gouging Prevention Act,” which died in the House last year. This gave them the opportunity to vote against something that sounds bad without actually doing any damage, since the proposal once again failed to get the 2/3 vote it needed to advance.
You well might wonder what the statute purports to make illegal. Here are the key provisions:
(1) IN GENERAL- It shall be unlawful for any person to sell, at wholesale or at retail in an area and during a period of an energy emergency, gasoline or any other petroleum distillate covered by a proclamation issued under paragraph (2) at a price that–
(A) is unconscionably excessive; and
(B) indicates the seller is taking unfair advantage of the circumstances related to an energy emergency to increase prices unreasonably.
Got that? Next question is, how do we know when a price is “unconscionably excessive,” “unfair” and “unreasonable?” Read on:
(3) FACTORS CONSIDERED- In determining whether a person has violated paragraph (1), there shall be taken into account, among other factors–
(A) whether the amount charged by such person for the applicable gasoline or other petroleum distillate at a particular location in an area covered by a proclamation issued under paragraph (2) during the period such proclamation is in effect–
(i) grossly exceeds the average price at which the applicable gasoline or other petroleum distillate was offered for sale by that person during the 30 days prior to such proclamation;
(ii) grossly exceeds the price at which the same or similar gasoline or other petroleum distillate was readily obtainable in the same area from other competing sellers during the same period;
(iii) reasonably reflected additional costs, not within the control of that person, that were paid, incurred, or reasonably anticipated by that person, or reflected additional risks taken by that person to produce, distribute, obtain, or sell such product under the circumstances; and
(iv) was substantially attributable to local, regional, national, or international market conditions; and
(B) whether the quantity of gasoline or other petroleum distillate the person produced, distributed, or sold in an area covered by a proclamation issued under paragraph (2) during a 30-day period following the issuance of such proclamation increased over the quantity that that person produced, distributed, or sold during the 30 days prior to such proclamation, taking into account usual seasonal demand variations.
Note how dumb these factors are. Have you ever seen a guy who owns a gas station price his gasoline at a level that “grossly exceeds” the price being charged by competitors whose product is “readily available in the same area?” Like, for example, the station across the street? That isn’t a crime, it’s economic suicide.
These days, of course, the gas stations are charging more for gasoline because they have to pay more for it. They are responding to “local, regional, national, [and] international market conditions.” The problem is that the price of crude oil his risen rapidly. American oil companies are tiny compared to their international competitors, and they control hardly any crude oil due to Congressional prohibitions on drilling. So they have to pay the going rate. (Exxon Mobil, for example, buys 90% of the oil it refines for use in the United States from foreign oil companies.) So, sad to say, there isn’t any “price gouging” going on.
The Democrats know this, but in the absence of a coherent policy they can think of nothing better to do than come out, ineffectively, against an “evil” that doesn’t exist.
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