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Cars line up at a Shell gas station, Friday, June 17, 2022, in Miami. (AP Photo/Marta Lavandier)

Last month, House leaders took a significant step toward giving the federal government the power to regulate gasoline prices by passing the Consumer Fuel Gouging Prevention Act. That bill is designed to combat the perceived issue of rampant price gouging by oil companies and other energy producers. However, the bill attempts to solve a fabricated problem. In doing so, it risks destabilizing the energy market and consequently creating gasoline shortages.

The bill includes two important amendments. One would grant the Federal Trade Commission broad power to conduct investigations into whether gasoline prices are being manipulated in ways that reduce refinery capacity. The other would supposedly establish a new unit at the FTC to protect consumer interests and monitor fuel markets for anticompetitive behavior.

The problem with this legislation is that it is extensive, and it gives the federal government tremendous power to interfere with market signals that are simply a reflection of supply and demand. As such, the House bill and a similar Senate bill are reminiscent of the ineffective policies of the 1970s that placed caps on gasoline sales and resulted in massive energy shortages, rationing and long lines at the gas station.

The high price of gasoline is particularly troubling for many Americans who already spend a considerable chunk of their paychecks on transportation. As of June 2, the national average cost for a gallon of gas stood at $4.715, the highest price in U.S. history. This average may still be increasing. A new report by JP Morgan indicates that it expects the price of gas may surpass $6 a gallon by August.

Americans have stated loud and clear that they expect policymakers to address the root cause of high gas prices. That root cause is, partly, due to a lack of adequate oil and gas production driven by hostile domestic policies such as scaling back lease sales on federal lands and increasing the oil royalty rate.

According to a new poll by Public Opinion Strategies, called the “True Cost National Online Survey,” 80% of Americans said federal policies were responsible for high gas prices. Most noteworthy, 88% of Americans stated that making it easier to “produce and develop American energy” was an effective strategy for reducing inflation.

Yet the administration has frequently stood in the way of the steps needed to increase energy production. Promises to cut carbon emissions and transition the American economy off fossil fuels have led to new barriers to oil and gas exploration and to the premature closure of coal and nuclear plants needed for keeping prices low.

While Americans certainly care about climate change, a large majority of Americans view inflation as the country’s top problem. A Pew Research Center poll released May 12 found that 93% of Americans thought inflation either “a very big problem” or “a moderately big problem.” The issue of climate change was only sixth in order of priority. American politicians should take note of this.

Congressional leaders should seek to remove domestic oil and gas production barriers. Actions such as these will go a long way toward stabilizing the oil market and helping bring down gas prices.


Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. This column was provided by InsideSources.

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