Gas prices are a nationwide concern, even at the highest level. The U.S. House passed two bills last week aimed at affecting the price consumers pay for gasoline.
Rep. Mike McIntyre, D-N.C., sponsored a bill titled The Federal Price Gouging Prevention Act, which allows the Federal Trade Commission to investigate and fine companies for charging exorbitantly high prices.
The other bill, sponsored by Rep. John Conyers, D-Mich., redefines the legal status of the Organization of Petroleum Exporting Countries and allows the U.S. to sue the oil cartel over the price of oil products.
The price gouging bill states that during an energy emergency, sellers of gasoline are forbidden to artificially raise prices or attempt to take advantage of consumers.
Sellers will be considered price gougers if their prices grossly exceed the prices of competitors or their own price of gasoline during the previous 30 days.
The legislation also defines penalties for sellers who falsify their costs to the FTC.
Penalties for price gouging can be as much as either $3 million or three times the amount of profit the seller made. Falsifying information given to the FTC will result in a fine of as much as $1 million.
Companies with sales in excess of $500 million per year will receive the majority of focus from the FTC.
"I was pleased to join Democrats and Republicans to support legislation that will help crack down on price gouging," McIntyre said in a May 24 press release.
To confront high gas prices from oil suppliers, the House passed the No Oil Producing and Exporting Cartels Act of 2007, which will allow the U.S. Attorney General to bring legal action against OPEC.
Rep. Steve Chabot, R-Ohio, co-sponsored the bill with Conyers.
In a May 22 statement, Chabot said the country must not lose focus on alternative energy sources.
"While it is important to target the anti-competitive practices of these price-fixing oil cartels, we must continue to press for increased domestic energy output, better alternative energy sources and greater energy efficiency."
OPEC was formerly protected from U.S. antitrust laws because it was considered to be an action of a foreign state.
NOPEC makes changes to Section 7 of the Sherman Antitrust Act - it states that any foreign entity that sets prices or limits oil production is accountable to U.S. antitrust laws because artificial pricing places strains on consumers.
Patrick Conway, a professor of economics at UNC, said that even though a cartel's actions can increase prices, the organization cannot control all of its members.
"It is indeed a problem of producer coordination putting upward pressure on prices," Conway said.
"Although, OPEC itself is not very effective at ensuring that its members adhere to price-setting or production-limiting agreements."
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