What the Biden administration can do if Hurricane Ian causes price gouging

President Joe Biden warned oil companies that if they use Hurricane Ian as an excuse to raise prices at the pump, his administration will take action. However, it is not yet clear what plans Biden has to counter potential price gouging.

Biden, speaking at Wednesday’s White House conference on hunger, nutrition and health, said Hurricane Ian will only slightly disrupt oil production and he will not tolerate energy companies benefiting from the natural disaster. Biden’s comments come as gas prices have fallen, improving the president’s political outlook. However, the federal government has limited tools to address price gouging head-on, and states are expected to protect consumers as the storm moves further up the coast.

“Don’t use this — let me repeat, don’t — use this as an excuse to raise gas prices or hollow out the American people,” Biden said said in a warning in the oil and gas industry.

Biden said the storm only affected daily production of about 190,000 barrels of oil, which accounts for less than 2 percent of the country’s daily production.

A gas pump in Florida before the hurricane
A gas station pump is seen on September 27, 2022 in St. Petersburg Beach, Florida. Hurricane Ian is expected to make landfall in the Tampa Bay area Wednesday night through early Thursday morning, and President Joe Biden has threatened his administration will take action if oil companies use the storm to raise gas prices.
Joe Raedle/Getty Images

“This small, temporary impact of the storm on oil production is no excuse — no excuse — for price hikes at the pump. None,” Biden continued. “If gas companies try to use this storm to raise prices at the pump, I will ask officials to look into whether price gouging is afoot.”

Biden did not specify what actions his administration would take in response to reports of price gouging. news week has reached out to the White House for comment.

“It’s unlikely that a hurricane will bring any massive price reductions, so it will be localized,” said Duncan Levin, a former federal prosecutor-turned-defense attorney news week in an interview.

Levin said he expects price gouging to be dealt with at the state level and that the federal government will only intervene if the problem is widespread.

Florida Attorney General Ashley Moody on Saturday announced an expansion of the state’s price-gouging hotline, as Ian intensified. Governor Ron DeSantis’ earlier declaration of a state of emergency prompted bans on excessive price hikes on food, water, hotels, gas and other essentials. Offenders could face fines ranging from $1,000 to $25,000.

North Carolina Attorney General Josh Stein also announced Wednesday that his state’s Price Cut Act is in effect pending Ian.

As gas prices soared to record highs earlier this year, the House of Representatives passed legislation in May that would give Biden the power to ban companies from seeking “excessive” or exploitative price hikes on gasoline and household energy. Legislation remains stalled in the Senate.

An April report by the Congressional Research Service found that while there is no federal law targeting price gouging or retail gasoline sales, antitrust laws prohibiting anticompetitive practices could result in retailers being prosecuted for collusion have to keep fuel prices high.

Levin said price gouging has been a problem historically during natural disasters and during the COVID pandemic, when personal protective equipment, hand sanitizer and other necessities have been harder to find. In response, the Department of Justice (DOJ) formed a task force in March 2020, directing US attorneys to prosecute “evil actors” hoarding “vital medical items.”

As Hurricane Ian prepares to hit Florida, Levin said the announcement by state and federal agencies that action will be taken to stop price gouging should act as a deterrent.

“It makes companies aware that this is not something that will be tolerated,” he said.

Carl Tobias, Williams Law Chair at the University of Richmond Law School, said news week in an email that if oil companies ignored Biden’s warning, they could threaten to launch an investigation into their prices or increase releases from the Strategic Petroleum Reserve.

“An investigation would be costly for companies in terms of reputation and the resources they would devote to defending against an investigation,” Tobias said, adding that it could potentially lead to prosecution.

The American Petroleum Institute (API) responded to Biden’s comments with a statement news week It is committed to “serving the energy market well and getting fuels to where they are needed most, while ensuring the safety of our workforce.”

“Gasoline prices are driven by market forces – not individual companies – and claims that the price at the pump is anything but a function of supply and demand are incorrect,” the API said.

Update 9/28/22 7:40 PM ET: This article has been updated with additional information and background.

https://www.newsweek.com/what-biden-administration-can-do-if-hurricane-ian-causes-price-gouging-1747332 What the Biden administration can do if Hurricane Ian causes price gouging

Rick Schindler

World Time Todays is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@worldtimetodays.com. The content will be deleted within 24 hours.

Related Articles

Back to top button