High gas prices could be alleviated by the Consumer Fuel Price Gouging Prevention Act — if it passes the Sena… - Vox.com

As the average consumer bears the brunt of rising gas prices, big oil and gas companies have continued to rake in historic profits. Lawmakers alarmed at the stark contrast between the industry’s earnings and consumers’ struggles pushed for — and passed through the US House of Representatives on Thursday — a bill that would make predatory price hikes unlawful and expand federal authority to investigate alleged price-gouging. The Consumer Fuel Price Gouging Prevention Act is meant to help alleviate rising gas prices; the national average gas price reached $4.45 per gallon last week — a record high for the US. Some states, like California, have seen gas prices reach $6 per gallon.

That has led to an unprecedented first quarter for oil and gas companies. According to an analysis by the watchdog group Accountable.US, the country’s top 21 companies took in $41 billion in profits during this year’s first quarter — $1.2 billion more on average per company compared to the same period last year, the report noted. Companies like Devon Energy are so flush with cash they’ve rewarded shareholders with “record” payouts. And Congress certainly has taken notice.

“I’m a proud capitalist, and what we’re experiencing with fuel prices is the result of a broken market,” said Rep. Katie Porter, a California Democrat and one of the original co-sponsors of the Consumer Fuel Price Gouging Prevention Act. “Big Oil executives are bragging to shareholders about price-gouging families at the pump. They’re purposely keeping supply low to earn record-high profits, squeezing families — and our entire economy — in the process.”

House legislators passed the bill with a vote of 217-207, with zero support from Republicans. Four moderate Democrats — Reps. Lizzie Fletcher, Jared Golden, Stephanie Murphy, and Kathleen Rice — bucked party line and voted against the bill.

“The Consumer Fuel Price Gouging Prevention Act would not fix high gasoline prices at the pump, and has the potential to exacerbate the supply shortage our country is facing, leading to even worse outcomes,” Fletcher wrote in a statement. “For these reasons, I voted no on this legislation.”

Even some Democrats who ultimately supported the legislation voiced concerns over the bill. “It just, you know, seems like we’re treating oil and gas like Big Tobacco, and sometimes they’re unjustly targeted,” said Rep. Vicente Gonzalez of Texas.

In addition to vetoes from the four Democrats and widespread Republican opposition, the legislation has received pushback from powerful industry lobbying groups, including the American Petroleum Institute and the National Association of Manufacturers.

With oil and gas corporations resisting regulations and virtually no support from Republicans, the fuel price-gouging bill may face an uphill battle in the Senate, where Democrats hold a slim majority.

What does the fuel price-gouging bill really do?

Under the Consumer Fuel Price Gouging Prevention Act, President Biden could move to declare an energy emergency.

Drew Angerer/Getty Images

The Consumer Fuel Price Gouging Prevention Act is comprised of a few main components: Firstly, the legislation would allow the president to declare an energy emergency effective for up to 30 days, though that declaration could be renewed.

During that energy emergency period, it would become unlawful for any person to sell consumer fuel at a price that is “unconscionably excessive” or that suggests exploitative practices. The bill would also expand the Federal Trade Commission’s authority to investigate and address potential instances of fuel price-gouging conducted by larger companies, defined as companies with $500 million in yearly wholesale or retail sales in the US. Under the bill, state authorities would be granted enforcement powers against fuel price-gouging violations through civil court action.

The legislation is meant to address record-high gas prices in the US, which some lawmakers and watchdogs allege have largely been manufactured by oil and gas corporations. Like other goods on the market, the cost of a gallon of gas is influenced by the market’s supply and demand. Major events like the COVID-19 crisis, Russia’s invasion of Ukraine, and a disrupted supply chain can influence the supply and demand of certain goods on the market.

What remains debatable, however, is how much the price of certain goods becomes affected when variables in the market change. There is no legal definition of what exactly constitutes price-gouging in the US. Oil and gas companies like Chevron and Shell may take advantage of the market’s instability by excessively hiking up gas prices while limiting production to boost profits, which in turn hurts consumers.

It is difficult to know how much of an increase in oil and gas production — which lawmakers like Rep. Porter are demanding — would be enough to alleviate current price-gouging concerns, or even if it would help address the gas crisis at all. Republicans nonetheless believe that targeting the industry isn’t a viable solution, but rather increasing domestic production is the way to alleviate pain at the pump. But GOP lawmakers likely won’t get their wish for a variety of reasons, including resistance from oil and gas companies. A survey conducted by the Federal Reserve Bank of Dallas in March found that many companies did not anticipate increasing production anytime soon. The Federal Bank of Dallas covers the Eleventh Federal Reserve District, including high oil-producing states like Texas and New Mexico.

On average, the Federal Reserve in Dallas survey found that oil and gas companies operating in the district are expecting crude oil prices to hit $93 per barrel by the end of the year, while some even expected prices to go as high as $200 per barrel. At the time of the survey in March, the price of crude oil had hit $100 per barrel. Nearly 60% of corporate respondents in the survey cited “investor pressure to maintain capital discipline” as the main reason oil companies weren’t drilling more despite soaring gas prices. Lawmakers naturally took notice.

Price gouging is anti-capitalist. Big Oil is threatening our entire economy by keeping supply low and jacking up prices at the pump far beyond the inflation rate to satisfy Wall Street.

Oil and gas company executives are *literally* admitting it. (THREAD ⬇️) pic.twitter.com/HosywUxU8Y

— Rep. Katie Porter (@RepKatiePorter) May 19, 2022

“Big Oil is threatening our entire economy by keeping supply low and jacking up prices at the pump far beyond the inflation rate to satisfy Wall Street,” Porter wrote in a tweet ahead of the fuel price-gouging bill’s approval by the House, citing the survey’s results. “Oil and gas company executives are *literally* admitting it.”

Analysts believe the best indicator of inflation is the consumer price index (CPI), which essentially measures changes in the prices of goods and services frequently bought by average consumers. The Bureau of Labor Statistics found that the consumer price index had increased 8.3% over the last 12 months ending in April. Among all categories included in measuring CPI, fuel oil prices had increased the most by far, jumping more than 80% over the past 12 months.

But high inflation rates aren’t only affecting gas prices — the housing market, as well as food and grocery prices, have seen soaring prices, too. The ripple effect can have an outsized impact on the average American, particularly low-income families with limited transportation options and who are already running on a tight household budget.

“This inflation thing is a real problem. When you’re paying twice as much to fill your gas tank and twice as much for everything, you’ve got to say to yourself, ‘Well, do I really need to buy everything at King’s [Food Market]?’” one shopper, who now splits her shopping between multiple stores to get the cheapest prices, told the New York Times.

Will the fuel price-gouging bill actually make a difference?

The San Francisco Bay Area leads the nation in high gas prices

Justin Sullivan/Getty Images

Opponents of the bill argue that price gouging is already illegal in most states, rendering the legislation moot. Instead, they believe that legislators should be focusing on increasing domestic energy production and improving the country’s competitive edge in the global market. The American Petroleum Institute called the bill “misguided” and labeled it as an empty attempt by Democrats to sway voters ahead of the midterm elections in November. Other industry groups feel similarly to many Republicans, who claim their concerns have to do with domestic production and energy security.

“[Combatting price-gouging] starts with opening our diverse resources on federal lands, approving responsible exploration and production, supporting sustainable permitting, and quickly building out more energy infrastructure,” Rachel Jones, vice president of energy and resources policy at the National Association of Manufacturers, wrote in a letter to House leadership in response to the bill.

According to AAA, the main factor driving high gas prices across the country is the tight supply of oil up against market demand.

“The high cost of oil, the key ingredient in gasoline, is driving these high pump prices for consumers,” Andrew Gross, a spokesperson for the company, said in a statement. “Even the annual seasonal demand dip for gasoline during the lull between spring break and Memorial Day, which would normally help lower prices, is having no effect this year.”

Supporters of the bill contend that corporate profiteering by oil and gas companies inherently worsen gas prices. But there is little consensus among experts on the fuel price-gouging bill’s effectiveness. Some believe it may even have a negative effect on the market.

“There is no material prospect that, in any enduring way, gouging legislation can have any substantial effect on inflationary pressure,” Lawrence Summers, the former Treasury Secretary under the Clinton administration, told Bloomberg Television in an interview last week. He added that there was a possibility such legislation may “cause and contrive all kinds of shortages” and undermine companies’ moves to boost supply.

Arguments over whether the fuel price-gouging bill is an effective enough solution to the US’s high gas prices may be for naught if the law is not approved by the Senate, where Democrats have been unable to pass important legislative items in the past, frequently failing to reach the 60-vote threshold needed to end a filibuster and move legislation forward.

But this may not be the last we hear of anti-price gouging legislation as lawmakers try to find ways to fight the economic downturn. Earlier this month, President Joe Biden called on the FTC and state attorneys general to crack down on price-gouging as part of efforts to manage the country’s baby formula shortage, following reports of unfair practices by individual resellers. He could follow suit for oil and gas as well.

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From This Price to $6.00? Gas Prices Could Go Much Higher - 19FortyFive

Gas prices continue to rise in the wake of the Russian invasion of Ukraine, after rising steadily since the beginning of 2021. On Thursday, the American Automobile Association reported that the average cost of a gallon of gas at the pump reached $4.59.

That’s a $0.26 increase since March 11, when gas prices hit a previous all-time high of $4.33 per gallon.

Just how high gas prices will go, however, is unknown.

Patrick DeHaan, an analyst from GasBuddy, suggested that prices could well surpass $5 this year.

“The goal posts are moving constantly. I think we probably have somewhere in the neighborhood of a one-in-three shot of the national average getting to $5,” DeHaan said this week.

“We’re definitely heading a little higher short-term, but we’re still waiting to see if the EU sanctions Russian oil. They talked about it. That could boost the momentum of getting close to $5.”

According to a recent note from JPMorgan, however, prices could also surpass $6 per gallon by August. Analysts at the international investment bank said that prices are likely to pass the $6 threshold as a result of a drop in supply and an increase in demand over the summer months.

Why Gas Prices Keep Going Up

The cost of gas is determined by a multitude of factors, though much of it can be explained by a shortage of supply. Even then, however, a short supply can also be determined by different factors.

Among those reasons is the COVID-19 pandemic, which threw the oil markets out of whack. As the world went into lockdown, oil producers began to wind down operations and produce significantly less oil than before. As fewer people went to work, fewer people needed gas for their cars. It resulted in the cost of oil plummeting beyond $0 for the first time.

Since the world’s economies have begun to reopen, however, demand shot up. OPEC countries, which produce oil, have committed to a conservative increase in oil production over the coming years to slowly meet that demand again – stopping short of quickly ramping up production, possibly over fears of future lockdowns. There is also fears that increasing production too fast could lead to a crash in prices.

As supplies run short, many NATO countries are now left with figuring out new sources of oil in the wake of the Russian invasion of Ukraine. As part of sanctions against Russia, the United States and some European countries are now actively seeking new oil suppliers to meet demand.

And even after President Joe Biden reneged on a promise to stop new drilling in the United States, domestic oil producers are not rushing to increase production. With the market still uncertain and the high costs of drilling new wells and establishing new infrastructure, it’s unlikely domestic oil producers will step up to the plate and make up for the shortfall unless prices rise even more dramatically.

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.

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Casperites feel impact of rising gas prices as House passes price gouging bill - Wyoming News Now

CASPER, Wyo. (Wyoming News Now) - On Thursday, the US House voted 217-207 to pass a bill giving the Federal Trade Commission the authority to investigate energy companies for alleged price gouging. The vote comes as gas prices hit new record highs across the country.

“I’m impacted financially, but we’re all forced to either pay the price or walk or ride a bike, which I’ve resorted to,” said one concerned Casperite named Ezra.

The bill, sponsored by Rep. Katie Porter of California and Rep. Kim Schrier of Washington, aims to ban the sale of fuel at an excessive price during energy emergencies. It would give the president the power to issue a declaration making it unlawful for energy companies to increase prices that are “unconsciously excessive.” The particulars of the price threshold were not contained in the bill.

Those against the bill cited concerns that it is targeting the oil and gas industry without proof of actual price gouging, or that it may further reduce supply and worsen the current situation.

In Casper, people are feeling the effects of rising gas prices and are making tough choices with their budgets.

“I’m a single mom, so it’s really hard for me because I live in MidWest, so we don’t get to come to town as much as we used to. We definitely don’t get to do as much as I used to. My daughter’s at state track right now so I had to come in, but it’s definitely been hard on my budget, we’re not doing as much as we could,” said single mother Katie.

In the days leading to the vote, it was unclear if the bill would have enough support to pass. Four Democrats joined all of the House Republicans in voting no. The legislation will head to the Senate, where many predict based on the lack of Republican support, it will not get the 60 votes needed to pass.

Copyright 2022 Wyoming News Now. All rights reserved.

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US home sales fell again in April as prices hit another record high - CNN

(CNN)Home sales fell for the third consecutive month in April as rising mortgage rates and affordability challenges pushed many would-be home buyers out of the market. Still, prices continued to climb, reaching an all-time high.

The median price of a home in April was a record $391,200, rising 14.8% from a year ago, according to a report from the National Association of Realtors. While price growth was robust, it was a slower annual pace of increase than in recent months and determined buyers pushed their budgets to the edge to buy a home before mortgage rates climb further.

The price increase marks more than a decade's worth of consecutive year-over-year increases, the longest running streak on record.

But as the average rate on a 30-year mortgage crossed over 5% in April, the rising cost of financing a home pushed some prospective home buyers out of the market.

Sales of existing homes, which include single-family homes, townhomes, condominiums and co-ops, dropped 2.4% from the prior month and 5.9% from a year ago. It was the weakest sales activity since June 2020.

"Higher home prices and sharply higher mortgage rates have reduced buyer activity," said Lawrence Yun, NAR's chief economist. "It looks like more declines are imminent in the upcoming months, and we'll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years."

Affordability remains a challenge

While showings of available homes for sale were down in April, according to tracking NAR does with lockboxes, demand among buyers remains strong, said Yun. In April, a typical home sold in a very swift 17 days and 88% of homes were sold in a month or less.

"The number of households interested in becoming homeowners remains high, despite waning confidence that now is a good time to buy," said Danielle Hale, Realtor.com's chief economist. "This is especially true among younger home shoppers, who are likely to be first-time buyers and are struggling to save for a down payment as rents continue to hit records."

Affordability remains a challenge for first-time home buyers, who comprised just 28% of the market in April. A year ago, they made up 31% of the market.

But not only are record high prices and rising mortgage rates putting a squeeze on home buyers, the persistently low supply of available homes to buy is still weighing on sales.

Inventory up, but remains low

The inventory of homes for sale ticked up 10% in April from March, but was down 10.4% from a year ago, according to NAR.

"Housing supply has started to improve, albeit at an extremely sluggish pace," said Yun.

He noted that the current housing market is in a rare state. While home price increases and a low number of days on the market suggest a strong housing market, he said, the sales declines are a sign of weakening.

"Maybe we are moving from an intense market where many homes get multiple offers into a less intense market," he said. "The transactions are still occurring and occurring quickly, if inventory is available."

Unfortunately, he said, there's a huge wave of potential inventory that is not being unlocked.

Some homeowners who may have considered selling their home may be deciding to stay put in part because they refinanced into a very low interest rate over the past two years. "They don't want to give up with super-low mortgage rates," Yun said.

While higher rates are expected to eventually rein in price increases, homeowners are still holding most of the cards.

"Sellers will want to keep on top of a rapidly adjusting market poised for a reset," said Hale.

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Pallone Floor Remarks on the Consumer Fuel Price Gouging Prevention Act - Energy and Commerce Committee

Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) delivered the following remarks on the House floor today in support of H.R. 7688, the Consumer Fuel Price Gouging Prevention Act:

Madam Speaker, today the House is taking action to protect consumers at the gas pump. This legislation is necessary right now because Big Oil companies are ripping off the American people.  

At a time when Americans are paying record high prices for gas, Big Oil is taking advantage of the instability caused by Russia’s unjust war in Ukraine and our ongoing economic recovery from the COVID-19 pandemic to rake in record profits. The largest four Big Oil companies collectively made $27 billion in profits during the first quarter of this year – some of these were record highs; others were the highest profits in over a decade. One CEO was so giddy about these profits that he said his company was, a quote, “cash machine.”  

These companies are indeed cash machines. Last month, the Energy and Commerce Committee held a hearing with the leaders of six Big Oil companies. During that hearing, in questioning from me, all six Big Oil CEOs refused to scale down stock buybacks, making it abundantly clear that their sole interest is their profits even when it comes at the expense of the American people.  

Instead of a traditional supply and demand economic model where we’d expect to see these companies ramping up production to meet rising demand, they are instead using their profits to buy back their own stock to further pad the pockets of their executives and shareholders.  

If oil companies want to produce right now, nothing is standing in their way. The oil and gas industry has more than 9,000 approved but unused drilling permits that could be used for production today.  

Instead, Big Oil companies are more interested in funneling billions to their shareholders and executives than in addressing record high gas prices. They are gouging consumers and manipulating the market by deliberately keeping production low, which keeps both prices and their profits high. 

You don’t have to take my word for it – oil and gas executives themselves admitted as much. In a recent survey, 60 percent of executives cited investor pressure to maintain capital discipline as the primary reason they are not increasing production. Only 6 percent said government regulations are impeding oil production.  

This profiteering must end, and that’s why the House must pass the Consumer Fuel Price Gouging Prevention Act. This legislation will put an end to price gouging, penalize market manipulators, and bring more transparency to the secretive oil and gas market. I thank Representatives Schrier and Porter for their leadership on this important legislation.  

It grants the president the power to declare an ‘energy emergency proclamation’ and makes it illegal to sell consumer fuels at an excessive and exploitative price during an energy emergency. The Federal Trade Commission (FTC) would then be empowered to go after fuel wholesalers and retailers for price gouging. It also empowers state attorneys general, including in the U.S. territories and the District of Columbia, to enforce against price gouging at the retail level.

The legislation also bolsters FTC’s ability to crack down on fuel market manipulation and doubles the maximum penalty for manipulating wholesale oil markets to up to $2 million a day for each violation.  

It also includes provisions that would improve market transparency and competition, which is so important since a large portion of the oil and gas pricing is done in the dark. We need to shed some light on how these prices are reached so that we can hold these companies accountable.

Madam Speaker, it is time we stop Big Oil from ripping off the American people. Let’s help lower gas prices at the pump by passing the Consumer Fuel Price Gouging Prevention Act today.  

And with that I reserve the balance of my time.    

###

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Seller profits drop at fastest pace in a decade amid home price growth slowdown: ATTOM report - Fox Business

Home price growth is slowing, and home sellers saw their profits drop at the fastest rate in about 10 years.  (iStock)

Home prices continue to rise, but the rate at which they're doing so is slowing rapidly, according to a new report from ATTOM Data Solutions. As a result, sellers' potential profits are being impacted.

Profit margins on median-priced single-family homes dropped to 47.2%, down from 51.6% in the fourth quarter of 2021, according to the company's 2022 U.S. Home Sales Report for Q1. It marked the first quarterly decline since 2019 and the largest decline in a decade.

In terms of gross profits, the typical single-family home in the U.S. brought in a profit of $103,000 in the first quarter. This is down from the average profit of $107,187 in the fourth quarter last year, but still well above the average $75,001 in profits in the first quarter of 2021.

If you are interested in lowering your home costs as prices rise and mortgage interest rates edge higher, consider refinancing to potentially reduce your monthly mortgage payment. Visit Credible to find your personalized interest rate without affecting your credit score.

HOMEBUYERS STRUGGLE WITH AFFORDABILITY AMID RISING PRICES AND INTEREST RATES: REPORT

Home prices still hit new all-time high

Home prices rose by 1.7% in the first quarter of 2022, from $315,000 in Q4 2021 to an all-new high of $320,500. This marked the ninth straight quarter of increases, ATTOM said, and rose by 16.5% compared with the first quarter of last year.

Even though median home prices are rising, home buyers are waiting less to find their next home. Homeowners who sold their homes in the first quarter of 2022 had lived there an average of 5.72 years, according to ATTOM's data. This is down from 6.12 years in the fourth quarter and from 6.82 years in the first quarter of 2021.

"Home prices simply can’t continue to go up as rapidly as they have for the past few years," said Rick Sharga, executive vice president of market intelligence for ATTOM.

If you are interested in buying a new home in today’s real estate market, comparing multiple lenders can help ensure you are getting the best pricing for your loan. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best mortgage rate for you.

FHA ADDS 40-YEAR MORTGAGE OPTION FOR THOSE RECOVERING FROM COVID-19 FORBEARANCE

Some markets could see modest price corrections

Although home prices are currently rising, worsening affordability could soon cause the price growth to slow in some housing markets. In fact, Sharga said borrowers could begin to see modest home value corrections in the coming months. 

"The combination of higher prices, rising mortgage rates, and the highest rates of inflation in 40 years may be pricing some prospective buyers out of the market, which means we may begin to see lower sales numbers," he said. "Ultimately, as affordability worsens, price appreciation should slow down, and we may even see modest price corrections in some markets."

Some metros are already experiencing home price declines. The largest quarterly decreases were seen in Macon, Georgia, which dropped 15.4%. In Kalamazoo, Michigan, prices dropped 10.9% and in Detroit, prices fell 10%.

If you are interested in buying a home, comparing multiple mortgage lenders could help reduce your monthly costs. Contact Credible to speak to a home loan expert and get all of your questions answered.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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House passes bill targeting alleged price gouging amid high gas prices - CNN

(CNN)The House has voted 217-207 to pass a bill that gives the Federal Trade Commission the authority to investigate energy companies for alleged price gouging as prices at gas pumps nationwide hit record highs.

The vote was largely down party lines with four Democrats, Reps. Kathleen Rice of New York, Stephanie Murphy of Florida, Jared Golden of Maine and Lizzie Fletcher of Texas joining all the Republicans in voting no.

The bill, sponsored by Rep. Katie Porter of California and Rep. Kim Schrier of Washington, gives the President the power to issue a declaration making it unlawful for energy companies to increase prices that are "unconsciously excessive", and authorizes the FTC to enforce those violating the act.

Murphy, who is not running for reelection, criticized the bill saying the measure "could further reduce supply."

"At best, this bill is a distraction that won't actually address the problem," she said in a statement. "At worst, it could make the problem more severe."

House Republicans urged their members to vote against the measure, with House GOP Whip Steve Scalise writing to Republican members that the bill "is an attempt by the Majority to distract and shift blame from the administration's self-inflicted energy and inflation crisis and blame energy producers, despite no evidence of price gouging."

The bill now goes to the Senate, where it is unlikely to garner the 60 votes necessary to overcome a GOP filibuster.

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