[Congressional Record Volume 151, Number 81 (Friday, June 17, 2005)]
[Extensions of Remarks]
[Pages E1262-E1263]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION ON THE GROSS OVERCHARGING UNDERMINES GASOLINE ECONOMICS, 
                              OR GOUGE ACT

                                 ______
                                 

                         HON. ALCEE L. HASTINGS

                               of florida

                    in the house of representatives

                        Thursday, June 16, 2005

  Mr. HASTINGS of Florida. Mr. Speaker, I rise today to introduce the 
Gross Overcharging Undermines Gasoline Economics, or GOUGE Act.
  As the travel season approaches, many children are out of school and 
families are happily looking forward to vacations. What they won't be 
happy about is the skyrocketing cost of getting to their destinations. 
Unfortunately, whether traveling on the road or in the air, this 
summer's vacationers will be hit hard by the escalating cost of 
gasoline.
  From March to April of 2005, the cost to fill up a tank of gas rose 
by more than 10 percent. That's more than twice the increase for the 
same period last year! But the detrimental effects of high gas prices 
don't just stop at the pump--they domino throughout every segment of 
the economy. For a basic item like a loaf of bread, it costs more to 
fertilize the wheat, more to transport the wheat to the baker, more for 
the plastic bag to package the bread, and more to get it to the grocery 
store.
  Meanwhile, President Bush has suggested little to lessen the impact 
of high gas prices. In fact, the President doesn't believe anything can 
be done. In April 2005, he was quoted as saying, ``An energy bill 
wouldn't change the price at the pump today. I know that and you know 
that.''
  With all due respect, Mr. President, plenty can and must be done. The 
Internet is full of comments from people reporting sudden gasoline 
price increases. In some cases, consumers have witnessed a 10-cent 
increase in less than 24 hours. There is no possible reason or 
explanation for these overnight increases. While states across the 
country are doing what they can to deal with complaints, they have 
limited recourse to make lasting, beneficial changes until there are 
consistent federal guidelines.
  The GOUGE Act that I am introducing today addresses federal 
guidelines against gas gouging in four parts. First, the bill imposes a 
penalty on gas retailers who raise prices on any given day at a rate 
that is twice the inflation rate. Prices are compared to a base price 
index derived from the contract price on the New York Mercantile 
Exchange and adjusted for regional variances. These variances take into 
account stringent pollution controls, altitude requirements, and 
special reformulations across the country. The penalties would be no 
less than $5000 for the 1st offense, no less than $10,000 for the 2nd 
offense, and no less than $25,000 for the 3rd offense or thereafter.

  A steady supply of oil is critical to cost effective gasoline 
production as well as national security. The second part of my bill 
helps to ensure this supply through use of the Strategic Petroleum 
Reserve (SPR).
  Following the oil embargo in 1975, the SPR was created to provide a 
domestic inventory of crude oil, and was intended to be used in 
emergency situations when the supply of crude oil to the United States 
is disrupted. The first such use of the SPR was in 1991 during the 
Iraqi invasion of Kuwait by then President George H. W. Bush.
  The current Administration, however, has a very different policy on 
the SPR. In November 2001, President George W. Bush ordered the SPR be 
filled to its current 700 million barrel capacity with oil from the 
government's share federally leased oil sites. Since then, maintaining 
this capacity has had a detrimental affect on oil price increases. 
First, continuing to fill the SPR at the same time it is 98% full takes 
oil from the open market, decreasing supply and thereby potentially 
increasing prices. Second, these additional fills to the SPR are being 
made while crude prices remain high and volatile. My bill suspends 
these new fills and releases an additional million barrels per day onto 
the open market for 30 days to significantly ease market concerns that 
lead to artificially inflated prices. The laws of supply and demand 
clearly support this idea as a basic tenet of economics.
  Third, the GOUGE Act directs the Federal Trade Commission (FTC) to 
report on anti-trust practices throughout the oil industry and

[[Page E1263]]

to make recommendations to protect consumers from price gouging. This 
report is essential for putting the oil industry on notice and 
developing sound federal price gouging legislation.
  Finally, my legislation establishes a Pricing and Economic Impact 
Commission to review the effect of oil supply and demand on the U.S. 
economy and national security. The Commission will be comprised or 23 
members. The President will appoint 11 members total (including at 
least 1 each) from the Environmental Protection Agency, the Department 
of Transportation, the Department of Energy, the Department of 
Commerce, the Council of Economic Advisors, and the Office of Science 
and Technology. There will also be 12 members appointed by the House 
and Senate.
  Mr. Speaker, our economy depends on reasonable gasoline prices to 
produce and transport items we use everyday. Without some kind of 
protection, we all pay higher prices for everything from food to 
pharmaceuticals. Now that the bubble on fuel cost has burst, prices 
will only increase. Without action, the supply demands of this summer 
will soon give way to increased requirements for the winter heating. My 
legislation works to protect consumers from arbitrary price increases 
by gas retailers, make effective use of the Strategic Petroleum 
Preserve, and monitor price irregularities in the oil industry.
  I ask for my colleagues' support and urge the House Leadership to 
bring it swiftly to the House floor for consideration.

                          ____________________