FOR IMMEDIATE RELEASE
June 24, 2008
Brian Kennedy (202) 434-8200
WASHINGTON, D.C. – The Institute for Energy Research (IER) today warned that price controls, if established under so-called price gouging proposals, would compound the consumer’s pain at the pump – just as it did during the Carter era. History has demonstrated that price controls create fuel shortages and supply disruptions.
“Price gouging proposals get attention in Washington because they help politicians assign blame to political bogeymen, but they do not lower the price at the pump for consumers and could lead to fuel shortages, especially in times of emergency,” said Thomas J. Pyle, president of the Institute for Energy Research (IER). “Like baseball and barbeques, price gouging rhetoric has become a rite of summer for Washington politicians. Today’s gasoline prices reflect record global demand for crude oil, but another year has gone by without an increase in American supplies. If the consumer is getting gouged, it’s by their own government.”
According to countless economists, price controls create even greater uncertainty in the marketplace, which could lead companies to suspend needed capital investments in domestic production and refining, making the U.S. even more dependent on foreign sources of crude oil, gasoline and other finished fuel products.
The Federal Trade Commission (FTC) and the U.S. Department of Energy (DOE) have both investigated alleged incidents of price gouging numerous times and have found no evidence gouging or manipulation, just market forces at work. Each investigation concluded that episodes of gasoline price increases were due to the operation of basic supply and demand.
The Institute for Energy Research (IER) is a not-for-profit public foundation that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. Founded in 1989, IER is funded entirely by tax deductible contributions from individuals, foundations and corporations. No financial support is sought for or accepted from government (taxpayers).