Democrats’ Garbage Gas-Price-Gouging Bill

The latest in “Useless Bills We Give a Fun Title to Use as a Club against Our Political Opponents When They Vote against It” is the Consumer Fuel Price Gouging Prevention Act.

Yesterday, Bill Pascrell Jr., a New Jersey Democrat, tweeted his dismay at the May 19 vote total for the bill in the House. He supported the bill, and it passed, but Pascrell laid into Republican members of Congress, none of whom voted in favor of it.

“If you just paid a fortune at the pump this weekend, we recently voted to crack down on gas price gouging and every single republican voted no,” he tweeted. The tweet, of course, went viral, garnering over 20,000 retweets and 55,000 likes.

Republicans were right to vote against the bill, as it will not lower gas prices for consumers.

If passed by the Senate and signed by President Joe Biden, the law would give the executive the authority to designate an area of the country as being in an “energy emergency.” Any gas station within the area that is charging “unconscionably excessive” prices or “exploiting the circumstances related to an energy emergency to increase prices unreasonably” is subject to penalties from the Federal Trade Commission.

A seller is engaging in price gouging if a commission the bill establishes within the FTC determines that the price during the emergency “grossly exceeds” the seller’s average price before the energy emergency or “grossly exceeds the price at which the same or a similar consumer fuel was readily obtainable in the same area from other sellers during the energy emergency period.”

On its face, the metric of “grossly exceeding” the seller’s prior prices is subjective and vague. If demand is high and supply low in an energy emergency, the price during the emergency will surely be higher than it was previously.

But it is in comparing the seller’s price to other prices in the area that the law would showcase its uselessness. If one gas station is charging $6 per gallon, and another gas station down the street is charging $4 per gallon, the market will punish the gouger before the government can. Consumers will choose to patronize the gas station selling gas for the lower price, incentivizing the gouger to lower his prices.

It is not the job of the government to police the market. Consumers can do it just fine on their own. This bill is simply a way for politicians to pretend that they are doing something to stop rising gas prices, while refusing to address its root causes. It should meet its demise in the Senate.