Gas Price Gouging or Grandstanding?

American consumers are paying a lot more than usual for gasoline, but economists don’t lay the blame on price gouging .

The market is driving up prices because D.C. politicos banned crude oil imports from Russia—the third-largest oil producing nation—in the wake of its invasion of Ukraine. 

But President Joe Biden and a lot of members of Congress don’t see it that way. “American oil and gas companies should not—should not exploit this moment to hike their prices to raise profits,” Biden declared during a Feb. 24 speech at the White House.

Even if they were overcharging, there’s no federal law to stop them. Yet Sen. Elizabeth Warren, D-Mass., and Rep. Alexandra Ocasio-Cortez, D-N.Y., are joining a chorus of lawmakers calling for action. 

Rep. John Garamendi, D-Calif., and 31 other members of Congress, sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Charles Schumer..

demanding an investigation into “illegal profiteering, anti-competitive business practices and price gouging within the oil and gas industry.”  

They plan to hold public hearings to question industry leaders, an approach that doesn’t make sense to Boston University professor Robert Kaufman of the Institute for Sustainable Energy. 

“The world price for oil is set on several heavily traded exchanges where there are lots of buyers and sellers and they set the price for crude oil,” Kaufman contends 

Oil-dependent industries, like agriculture, plastics, chemicals, homeopathy and healthcare, compete for every barrel during a war and supply crunch, he notes. 

Still, laws against taking advantage of scarcity are on the books in 37 states, Guam, Puerto Rico, the U.S. Virgin Islands and the District of Columbia. Most of the statutes concern shortages caused by natural disasters or other emergencies. 

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