Lawmakers Call for Probes of Alleged Gas Price Gouging

In a sign of growing political anxiety over high gasoline prices, members of Congress issued a bipartisan call Tuesday for authorities to more aggressively investigate whether there has been price gouging.

Returning from summer recess, lawmakers held the first of what is expected to be several hearings on gas prices and introduced a raft of legislation.

One bill would temporarily suspend the federal gasoline tax. Another would empower the president to temporarily freeze gas prices at or below levels before Hurricane Katrina struck.

Few of the measures are expected to be enacted. But lawmakers were eager to show concern about soaring prices at the pump.

When Congress recessed more than five weeks ago, lawmakers returned home to trumpet their accomplishments, including passage of an energy bill. But many quickly received an earful from constituents about high gas prices.

The issue took on greater urgency after Hurricane Katrina damaged Gulf Coast oil rigs and refineries, driving gas prices up to more than $3 a gallon around the country.

Sen. Jon Corzine (D-N.J.), who is running for governor in his state, said he had rarely heard as many complaints “as I have been over the last three or four days out on the stump with regard to gas prices.”

The Senate Energy and Natural Resources Committee hearing was held as the U.S. average gasoline price slipped Tuesday to $3.041 for a gallon of self-serve regular, down from the record of $3.057 a gallon set Monday, according to the American Automobile Assn.

Motorists in all but 17 states were paying more than $3 a gallon, on average, for regular gas, the AAA service station survey found.

But federal officials told the committee that they expected gasoline prices to begin to decline in the coming weeks and average about $2.60 a gallon later this year and $2.40 for 2006. But they also projected that heating oil prices, with normal weather, would be much higher, averaging about 30% more than last winter.

Congressional Republican leaders said the hurricane focused new attention on the need to increase refinery capacity. Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Energy Committee, said the disaster “exposed the harsh reality that we have been skating on thin ice when it comes to the concentration of energy infrastructure and production on the Gulf Coast.”

The proposal to temporarily suspend the federal gasoline tax of 18.4 cents a gallon has increasing support among Republicans. But the measure probably would face stiff opposition because it would reduce funding for politically popular highway projects.

Sen. Byron L. Dorgan (D-N.D.) said, “Most likely, Congress will do little or nothing or talk a great deal and hold hearings.”

Another hearing on gas prices is scheduled today before the House Energy and Commerce Committee.

Supporters of opening part of Alaska’s Arctic National Wildlife Refuge to oil and gas drilling are expected to seize on the high gas prices to try to win congressional approval for the long-debated initiative.

But Arctic drilling opponents have said that it would take years to tap the oil beneath the tundra and contend that proponents have exaggerated the amount of oil there.

Republican and Democratic lawmakers expressed suspicion that the rise in gas prices could be partially the result of profiteering, and they urged heightened federal scrutiny.

Sen. Gordon H. Smith (R-Ore.) said: “I will defend free markets all day long. I will not defend a rigged or broken market.”

“It seems to me that the [Federal Trade Commission] is not aggressively pursuing the matter of price gouging,” Smith added.

Officials from the FTC could not be reached for comment.

Guy Caruso, administrator of the U.S. Energy Information Administration, said that in “isolated instances,” there “most likely” have been abuses.

Sen. Dianne Feinstein (D-Calif.) recalled that during the 2000-01 California electricity crisis, many officials scoffed at her claims -- since proved -- that there was market manipulation.

She also said she had sent a letter in mid-August to seven oil companies that serve California urging voluntary price restraint and had yet to receive a response from one.

Although no executives from the big oil companies were present at Tuesday’s committee hearing, Domenici pointed to the tables in front of him and warned that if any executives were found to be profiteering, “they will find themselves in those witness chairs.”