FTC chief sees danger in gas-gouging law

WASHINGTON — The head of the Federal Trade Commission predicted Thursday that Congress would pass a gasoline price-gouging law despite her warnings that the country doesn’t need one and it might cause fuel shortages.

FTC Chairwoman Deborah Platt Majoras said she has warned Congress publicly and privately about the dangers of such a law.

“We looked vary carefully but didn’t see any new legislation needed to protect consumers,” Majoras said at an antitrust conference Thursday. “Will new legislation be passed? I think we will see a price-gouging statute pass, perhaps at the end of this (incoming) Congress.”

With gas prices rising to over $3 per gallon this spring, the House passed a bill permitting large fines and jail time for price gougers. The Senate has not acted on it and Sen. Max Baucus, D-Mont., the incoming Finance Committee chairman, said Thursday, “There’s a lot more that has a higher priority.”

Majoras said she understood the public’s frustration and concern but said an upcoming FTC report on the price spikes found that consumer demand was up at the time.

“There is a distinction between a market determination you don’t like and a market failure,” she said.

Testifying in May before the Senate Commerce Committee, Majoras said retailers might let the gas run out rather than raise prices and risk facing prosecution. She noted the price spikes after Hurricane Katrina last year resulted in more fuel getting to market.