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WASHINGTON -- A proposed bill that would have given the Federal Trade Commission the authority to penalize oil companies accused of charging excessive prices for gasoline during supply spikes failed to pass a House of Representatives vote.
With a veto promise from the White House, the vote was 276-146 in favor of the bill, falling short of winning the two-thirds "yes" votes necessary to clear the chamber, reported Reuters.
The proposed legislation was stringent and provided the latitude to fine companies up to $150 million, while individuals faced a fine of up to $2 million and a 10-year prison term.
The Bush administration's position was that if the bill passed, price controls could lead to the long lines at the gasoline pumps last experienced during the late 1970s. "By controlling prices, [the bill] would interfere with market mechanisms and distort price signals that encourage suppliers to provide more gasoline," the White House said in a released statement.
The administration is encouraging Congress to pass legislation that would increase domestic oil production and encourage refineries to expand.
The legislation was also opposed by the National Petrochemical and Refiners Association, which said if the bill laws passed it could threaten the ability of U.S. refiners to provide gasoline, diesel and jet fuel at prices necessary to maintain adequate supplies during emergencies, reported Reuters.
This was one of several energy bills that lawmakers planned to act on this week before they leave for their July 4 holiday recess. The House is also expected to take up legislation that would require oil and gas companies that have held drilling rights on federal leases for years to explore for supplies on those acres or lose the right to obtain new leases, reported Reuters.
While lawmakers and citizens alike cry foul over rising pump prices, economists say legislative action will have little impact on crude oil trading prices.
One of the nation's best-known energy experts, Daniel Yergin, will join numerous other energy experts in a conference with congressional leaders later this week. These energy experts are unified in the position that the rise in oil prices can be explained by basic economic factors, such as the limited growth in supplies in recent years, a weakening dollar, a global surge in energy demand and a string of production disruptions in countries like Nigeria, reported The New York Times.
"When an issue is this hot, it would be so much easier if there was a single reason to blame," Yergin, chairman of consulting firm Cambridge Energy Research Associates, and the Pulitzer Prize-winning author of "The Prize," said in an interview with the paper, previewing his testimony before Congress.
"The oil shock is real and is about the hottest political issue right now," he told the paper. "So Congress feels the pressure to do something but there is not much it can do to promote peace in Nigeria or to get the value of the dollar to go up."