US Democrats target oil giants 'ripping off' motorists
House Speaker Nancy Pelosi (AFP / MANDEL NGAN)

US Democrats announced legislation Thursday to punish fuel companies they accuse of unfairly raising prices at the pump, as record inflation threatens the party's prospects in November's midterm elections.

The reforms would allow regulators to impose heavy fines on companies exploiting the war in Ukraine and a pandemic-related surge in crude prices to cash in at the expense of American motorists.

"At this time of war -- at any time -- there is no excuse for Big Oil companies to profiteer, to price gouge or exploit families," House Speaker Nancy Pelosi told a news conference.

"That is why Democrats are moving forward with forceful action that will stop, and hold accountable, oil and gas companies for profiteering and manipulating markets."

The push comes with gasoline prices skyrocketing from an average of $2.89 a gallon a year ago to $4.14, according to AAA data published Thursday.

The Democrats' proposals would give the Federal Trade Commission and individual states increased authority to go after businesses that manipulate prices in both wholesale and retail sales.

They are hoping to pass legislation before the end of May but would need support from Senate Republicans, who are pressing instead for hikes in domestic fossil fuel production.

House Energy and Commerce Committee Chairman Frank Pallone said however that oil giants were "ripping off the American people" by suppressing production to maximize profits.

Driving up costs

Maria Cantwell, Pallone's counterpart in the Senate, said elevated pump prices were driving inflation -- which is at a 40-year high -- and threatening the post-pandemic recovery.

"In the state of Washington, many of my constituents are paying $4.50 a gallon and that means that average Washington drivers will be forced to shell out $750 more to fill up this year than they did in 2021," she said.

"It's even worse for West Coast truckers who are facing diesel costs as high as $6.60 a gallon, and that is driving up the price of every good that is delivered because of those transportation costs."

In March, President Joe Biden announced a record release from US strategic oil reserves of a million barrels of every day for six months to "ease the pain" of soaring prices.

Some Democrats facing tough re-election fights in November have also floated a federal gas tax holiday that would save motorists around 18 cents a gallon, but Pelosi appeared to rule out the idea.

"There had been some interest in the holiday. The pros of it are that it's good PR," she said.

"The cons are that there's no guarantee that the saving... would be passed on to the consumer. We have no evidence to think that the oil companies would pass that on."

AFP reached out to the American Petroleum Institute for its reaction to the announcement but there was no immediate response.