When a crisis strikes, Americans can count on Congress to swing into action. So as gasoline prices soared toward $3 per gallon, lawmakers did what they do best: They complained.
“We believe that federal law enforcement agencies and regulators should take every available step to ensure that all federal laws protecting American consumers from price-fixing, collusion, gouging and other anti-competitive practices are vigorously enforced,” House Speaker Dennis Hastert and Senate Majority Leader Bill Frist wrote in a joint letter to the president.
Their colleague Sen. Ted Kennedy, D-Mass., apparently agrees. He told NBC’s Meet the Press on April 23, “The president should have called the head of the oil companies into the White House and started jawboning. He should have done that a week ago.”
Stern calls for investigations may play well politically. But they won’t accomplish anything. For one thing, an investigation -- one ordered by last year’s energy bill -- is already underway.
Besides, price gouging isn’t the problem. The Federal Trade Commission already “tracks retail gasoline and diesel prices in some 360 cities across the nation” through daily updates from the Oil Price Information Service, a private data-collection company.
The FTC’s Web page explains, “An econometric model is used to determine whether current retail and wholesale prices each week are anomalous in comparison with historical data.” In other words, if someone’s gouging, the feds will know about it.
As for “jawboning,” there’s enough of that, too. The Democratic Congressional Campaign Committee recently recommended candidates for Congress “hold an event at a gas station.” Good idea -- if your goal is political gain. But it won’t do a thing to lower prices at the nearby pumps.
Gasoline prices are governed by the laws of supply and demand. If we want lower prices, we must bring more gasoline to the market. And here’s where policymakers actually can help.
President Bush has already taken one step to provide short-term relief by temporarily suspending the environmental rules for gasoline. Congress should step up now and repeal regulations that require different blends of gasoline, at different times of the year, for different areas of the country.
Right now, refineries must produce more than a dozen separate blends of gasoline and ship them out to various parts of the country on a strict schedule. That slows the supply chain and causes shortages.
Lawmakers should allow gas to become a true commodity again by letting refiners make a single blend and sell it nationwide.