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HARTFORD, Conn. – With the price of gasoline climbing and the summer driving season around the corner, some of Connecticut's Democratic legislators have crafted a plan to help provide relief at the pump and protect consumers from profiteering and price gouging by big oil wholesalers.
"In this economy, the exorbitantly high price of gas is a burden for working families," said state Sen. Bob Duff, D-Norwalk, who supports the plan. "This comprehensive plan attempts to rein in gas prices, but more importantly it ensures big oil companies cannot take advantage of consumers by artificially inflating gas price to fill their own pockets."
The price of gasoline is up 15 percent since Jan. 1 and could rise as high as $5 a gallon by the middle of the summer.
The Democrats' plan:
- Caps the gross receipts tax on motor fuels at $3/per gallon wholesale, upon passage. Sunsets June 30, 2013.
- Prohibits oil wholesalers and distributers (those who pay the gross receipts tax) from passing on anything purporting to be based on the tax for the portion of any sales price over $3 per gallon. Any such overcharging a Connecticut Unfair Trade Practice Act violation.
- Amends the petroleum profiteering statute, C.G.S. § 42-234 et seq. ("abnormal market disruptions") to include an automatic trigger based on extreme wholesale price increases, for price gouging protections to go into effect. Puts everyone in supply chain on notice of serious penalties for increasing their profit margins during such disruptions.
- Legislatively declares an "abnormal market disruption" upon passage for a set period of one month in anticipation of further wholesale price spikes. The wholesale price at the Port of New Haven is up $.13 since March 1; The spike has not hit the pumps, with average retail prices rising only $.02 cents since March 1 from $3.99/gal to $4.01/gal.
- Grants the commissioner of the Department of Consumer Protection authority to impose CUPTA fines of up to $10,000 upon large gasoline wholesalers and distributors who are in violation of profiteering laws.This will strengthen the Commissioner's authority, necessary because large wholesalers in violation of profiteering statutes have much greater impact on consumers than individual retailers.
- Institutes similar profiteering protections in regards to home heating oil.
Moderate and lower-income families feel the rising price of gasoline especially hard. According to a recent report by the Brookings Institute:
"Every dollar increase, holding the number of miles driven constant, would cost these moderate and lower-income households an extra $530 per year. For a family with an annual income of $20,000, this is an additional 2.7 percent of their total income. Although higher gas prices eventually encourage consumers to cut back on driving or switch to more fuel-efficient vehicles, in the short run they may have few options but to cut back on other expenditures in the family budget. Since low- and moderate-income families spend most of their income on average, in the very short run they can only choose between spending less on other items and going further into debt."
This feels like the perfect storm, said Gloria McAdam, president and CEO of Foodshare, in a statement. "More people need food because of rising gas prices. And Foodshare is challenged in getting more food to people who need it because of those same rising fuel prices. Any relief the state can provide will be welcomed by both working families and the nonprofit organizations, like Foodshare, that are striving to help those working families."
Comments (8)
Why can't the government buy the gas for me? Why do I have to work to heat my house, run my car and buy my own food? Its not fair that I have to work for a living and politicians don't...
What is worse is that Duff has nothing to do with this...he is merely restating the fact that the gas tax cap has finally been adopted when the price has gotten so high that the amount of tax is obscene. To be clear, Bob Duff has had absolutely nothing to do with this, he is just saying that the fact that someone else has done something is ok with him.
Mr. Duff, you'll get a lot more mileage with your Fairfield county constituents if you act to abolish zone pricing in Connecticut, which in a monopolistic manner inflates our gas prices by 10-15 cents a gallon over the rest of the state.
And what are you gouys doing with the tank fund??? Are you going to keep that a secret from the public?? Just to make people aware. The state is planning on ending the tank fund. Why is this a big deal you ask?? Well, as most people don't know the oil companies do not own a majority of the stations in the state. There are only 2 companies that own a large amount of stations but those companies lease them to private jobbers who are the ones that pay the expenses on the property not the big company. In the event that the state decides to nix the tank fund, you will be seeing multiple stations closing and in turn be prepared to drive 20 miles to get to an open gas station. If the stations are forced to pay for tank insurance then as I just said the little guy trying to run his business will close. Station owners are paying small fortunes just to keep gas in the ground and make their money back. Why don't you ask Obama why he hasn't opened up both coasts for production to drop the price because he won't his energy secretary has said from day one that they want gas to hit $5. And by the way the big oil companies don't care about CT because there are counties in other states bigger than our whole state, there are more people in NYC than CT. Lets say shell and exxon pulled out of CT, it wouldn't affect there bottom line at all, they won't even notice.
When the gas price goes up Europe, people start taking the train or biking to work. Thanks to our cars-only transportation planning, most of us don't have that option. The solution is not to bend-over-backwards in a futile attempt to keep gas cheap. The solution is to give people alternatives.
What A joke! It's ok for the state to gauge consumers with taxes but not the oil companies. Profits are bad! I was in NJ yesterday and prices are 30 -40 cents cheaper. Duff you are done as a legislature.
Educate youself about the New Jersey gas laws and then you might understand why Jersey is the way it is.
But nothing to protect those in Fairfield County from paying much higher prices than elsewhere in the state and why would this bill sunset? Is taxing up to $3.00 not enough? Surely one doesn't expect that prices will be lower in 2013 with the present energy policies in place.