Democrats in the US Congress have decided to take on big oil companies after the gasoline prices hit a near-record $3.05 per gallon within a week. Picketing in front of an Exxon station near the Capitol Hill, half a dozen senators belonging to the party, vowed to sponsor a legislation to control the oil industries, though the analysts opine that such a bill has scanty effects on oil companies.
It is well known that gas prices are getting higher, and American people are concerned about it. Adding to their protest at the station on Massachusetts Avenue, lawmakers have already been look into breaking up the monster companies. The Senate Commerce Committee adopted Sen. Maria Cantwell’s anti-price-gouging bill on Tuesday. Sen. Bernard Sanders is to sponsor bill on a windfall profits tax, pointing to $440 billion in proceeds over the past six years for the nation’s five major oil companies. He said,
“I think it’s time to say to these people, ‘Stop ripping off the American people.”
The Energy Information Administration of the US federal government earlier predicted unleaded gasoline price as $2.95 a gallon this summer, 11 cents a gallon rise compared to last summer. This week in a press release, it said,
“Continuing problems for refineries in the United States and abroad, combined with strong global gasoline demand, have raised our projected average summer gasoline price by 14 cents per gallon.”
In a mid-April survey conducted by Washington Post-ABC News, the Americans expressed strong views against the rising gasoline prices. More than two-thirds of U.S. citizens said that gasoline price swell had caused financial suffering for their households whereas 36 percent said that the hardship had been grim.
Over the preceding four years congressional outrage on price increases have become a ritual.Even last year, the Republican dominated Congress discussed a $100 discount for consumers, a levy on oil inventories, steps against price scrape and regulatory changes. But most of these washed out at the end of the legislative sessions.
This time, Democrats have focused on two-prong strategy on gasoline prices. First one is direct measures like pricing bill and secondly, for increase in fuel efficiency .
On Tuesday, Nancy Pelosi, the house chairwoman asked the Energy and Commerce Committee to adopt a bill proposed by Republican Bart Stupak to give the federal government more authority to pursue indictments of price gouging. This bill backed by
100 co-sponsors, aims at preventing unconscionably extreme pricing or instances of gross discrepancy between the prices of crude oil and gasoline and calling for tough penalties, including fines up to $150 million or up to 10 years in imprisonment for executives. It is scheduled for hearing on May 27.
But analysts are cynic about efficacy of such a bill. Even last year, on congressional query on price gouging, Federal Trade Commission could barely define it. American Petroleum Institute economist John C. Felmy told at a Senate Committee hearing,
“The price-gouging legislation was of grave concern. It is so vaguely written in terms of what is price gouging and has such onerous penalties that we are very concerned that it could have unintended consequences. Gasoline suppliers, uncertain about their ability to raise prices, might just shut down.”
Democrats representatives blame a series of oil mergers in past years for giving large companies the market control to drive up price margins. David Sexton, president of Shell Oil Products, disagrees with this view. He said,
“I would beg to differ about whether this is a question of industry concentration and instead a factor of supply-and-demand economics.”
Democrats are also prepared to bring a bill to mandate a 10-miles-per-gallon boost in fuel efficiency for new vehicles over coming 10 years. But this won’t look potent to lower gasoline prices. Severin Borenstein, director of the University of California Energy Institute told,
“This is the usual song and dance that politicians feel the need to go through when prices go up. The increase in mileage standards would not be enough to offset the growth in demand as the economy and population grow.”
Via:Washington Post
