(Bloomberg) — The Senate will vote on legislation that would beef up the Federal Trade Commission’s authority to go after gasoline price manipulation, Senate Majority Leader Chuck Schumer said Thursday, as Democrats seek to tame sky-high gasoline prices that jeopardize their chances of keeping control of Congress after the November election.
The bill would require the support of at least 10 Republicans in the evenly divided Senate, an unlikely prospect considering GOP lawmakers blame high fuel prices on Democratic policies. Schumer said moving the legislation to the floor would force Republicans to choose sides between big oil or consumers.
With gasoline prices averaging more than $4 a gallon, the legislative push gives Democrats a chance to shift the spotlight to record oil industry profits and stock buy backs amid accusations of profiteering off of the spike in oil prices caused by Russia’s invasion of Ukraine.
“We need some real tough oversight,” Schumer said at a press conference alongside House Speaker Nancy Pelosi and other top Democrats. “It’s time for the FTC to roll up its sleeves and drill down on what’s going on at the big oil companies.”
But debate on a bill that would so directly affect consumers risks handing Republicans a high-profile forum in which to batter Democrats on inflation — a top concern for voters — in the months before the midterm election.
“Inflation is surging out of control. People are suffering, having to choose between putting food on the table or gas in the car,” Representative Fred Upton of Michigan, a top Republican on a key House energy committee, told Energy Secretary Jennifer Granholm on Thursday. “Republicans have been sounding the alarm.”
The legislation would broaden the authority of the independent consumer protection agency to go after false market information designed to artificially inflate prices and establish a new unit within the FTC devoted to monitoring and analyzing oil, gasoline and other fuel prices, according to a draft summary obtained by Bloomberg News. It would also double the maximum penalty for manipulating wholesale oil markets to $2 million a day.
President Joe Biden has previously asked the FTC to investigate possible illegal conduct in U.S. gasoline markets. But Republican members of the commission have asked for evidence to back up that claim, and analysts have cast doubt on its existence.
“There is little evidence of price gouging or that such an effort would affect prices,” Benjamin Salisbury, director of research at Height Capital Markets, wrote in a research note Wednesday.
The oil industry’s top lobbying group has dismissed the legislative effort as being without merit.
“Repeated in-depth investigations by the FTC have shown that changes in gasoline prices are based on market factors and not due to illegal behavior,” Frank Macchiarola, the group’s senior vice president of policy, said in a statement.
Democrats have few good options to quickly bring down prices at the pump. Biden’s efforts to tap the nation’s Strategic Petroleum Reserve, including a record 180 million-barrel release from the emergency oil supply, has so far had a muted effect.
While some Democrats have pushed for a gas tax holiday to temporarily suspend the 18.4-cent federal tax to bring prices at the fuel island, Pelosi, in her remarks Thursday cast doubt on that effort noting their was no guarantee the savings would be passed on to the consumer.
The national average cost for a gallon of regular unleaded was $4.141 as of Wednesday, according to data from auto club AAA.