Lower Prices at the Pump Act
- Sponsor
- Rep. McDonald Rivet, Kristen [D-MI-8]
- Committees
- Education and Workforce Committee (primary)
- Last action
- May 7, 2026
Bottom line
This bill aims to prevent price gouging on gasoline and other fuels during a specific national emergency, empowering federal and state authorities to enforce price limits and directing collected penalties to energy assistance programs for vulnerable populations.
What it actually does
This bill prohibits the sale of gasoline and other petroleum distillates at an "unconscionably excessive" price during a period defined by military operations against Iran and the closure of the Strait of Hormuz. It outlines factors for determining excessive pricing and establishes enforcement mechanisms through the Federal Trade Commission (FTC), State attorneys general, and criminal penalties. Funds collected from penalties are directed to the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program.
Proponents argue
Supporters argue that the bill is a critical consumer protection measure, shielding the public from predatory pricing during times of national crisis and geopolitical instability. They contend it ensures essential fuels remain affordable and prevents corporations from exploiting emergencies for undue profit. The redirection of penalty funds to low-income energy assistance programs is highlighted as a direct benefit to vulnerable households.
Opponents contend
Opponents might contend that price controls distort free markets, potentially leading to unintended consequences such as supply shortages or disincentivizing production and distribution when it is most needed. They could argue that the bill's defined period and pricing factors are arbitrary and could harm legitimate businesses facing increased operational costs and risks during a conflict, ultimately making fuel less available.
The bill is concise and clearly structured, allowing an informed reader to understand its core provisions and implications within a short timeframe.
Section 2(a)
Prohibition on Unconscionably Excessive Fuel Pricing
This section makes it illegal for any person to sell or offer for sale gasoline or other petroleum distillates at a price that is deemed "unconscionably excessive" during a specific period of national emergency. The price must also indicate that the seller is taking unfair advantage of the circumstances related to the emergency to increase prices unreasonably. This core prohibition forms the basis for all subsequent enforcement actions.
Supporters argue
Proponents argue this provision directly addresses consumer vulnerability during a crisis, preventing exploitation and ensuring access to essential fuels. They assert it establishes a clear legal standard against profiteering.
Critics contend
Opponents might contend this could lead to supply disruptions if sellers cannot cover their legitimate costs or are disincentivized from bringing fuel to market in high-risk environments due to fear of arbitrary enforcement.
Tradeoffs
This provision balances the immediate need for consumer protection during a crisis against the potential for market distortions and supply chain challenges that can arise from price controls.
Section 2(b)
Duration of Price Gouging Prohibition
The prohibition on excessive pricing begins immediately upon the enactment of this Act. It will end when the President, after consulting with key congressional leaders (Speaker of the House, Majority Leader of the Senate, Minority Leaders of both chambers), formally declares that military operations against Iran (which began in March 2026) have ceased indefinitely and certifies to Congress that the Strait of Hormuz is fully open and global shipping through it has resumed without impediment.
Section 2(c)
Criteria for Assessing Unconscionably Excessive Prices
This section outlines the specific factors that must be considered when determining if a price is "unconscionably excessive." These factors include whether the price grossly exceeds the average price from the 30-day period prior to February 28, 2026, or the price offered by competing sellers. It also considers if the price reasonably reflects additional costs or risks incurred by the seller, or if it is substantially attributable to broader local, regional, national, or international market conditions, aiming to distinguish legitimate cost increases from exploitation.
Section 3(a)
FTC Enforcement Authority
A violation of the price gouging prohibition is explicitly designated as an unfair or deceptive act or practice under the Federal Trade Commission Act. This grants the FTC the full scope of its existing powers, jurisdiction, and duties to enforce the new prohibition, including the ability to levy penalties. This means the FTC can investigate, bring civil actions, and impose remedies consistent with its established authority.
Section 3(b)
State Attorney General Enforcement Powers
State attorneys general or other designated state officials are empowered to bring civil actions in federal court on behalf of their state's residents. These actions can seek to stop illegal practices, enforce compliance, obtain damages or restitution for consumers, or secure other appropriate legal and equitable relief. States must provide written notice to the FTC before filing an action, and the FTC retains the right to intervene. However, a state cannot bring an action if a federal action by the FTC or Attorney General is already pending against the same defendant for the same alleged violation.
Section 3(c), (d), (e)
Criminal Penalties and Consumer Relief Trust Fund
In addition to civil penalties, individuals or entities violating the price gouging prohibition can face significant criminal fines, up to $500,000,000. These criminal penalties are imposed through actions brought by the Department of Justice, which is directed to prioritize cases against companies with annual U.S. wholesale or retail fuel sales exceeding $10,000,000,000. All collected penalties are deposited into a newly established "Consumer Relief Trust Fund" in the Treasury. The funds from this trust are then specifically earmarked to provide assistance under the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program, directly benefiting vulnerable households.
The core prohibition relies on the terms "unconscionably excessive" and "unfair advantage," which are then elaborated by a multi-factor test in Section 2(c). This test includes considering historical prices, competitor prices, additional costs/risks, and market conditions.
Section 2(a) and 2(c)
Why it matters:This is standard legislative practice to define broad legal terms through specific criteria. However, the subjective nature of phrases like "grossly exceeds" or "reasonably reflects" within these factors can still create ambiguity, making the practical application less straightforward than the initial prohibition suggests.
Case for: Proponents argue that a multi-factor test provides necessary flexibility for enforcement agencies to consider the complex nuances of dynamic market conditions, rather than relying on rigid price caps that could be counterproductive or unfair to businesses facing legitimate cost increases.
Case against: Opponents contend that such subjective criteria create significant legal uncertainty for businesses, making it difficult to determine compliance proactively and potentially leading to arbitrary or inconsistent enforcement based on differing interpretations.
Estimated impact: This provision significantly impacts how the price gouging prohibition is applied and enforced, directly affecting the legal risk for all fuel sellers and the effectiveness of consumer protection.
The Attorney General is directed to give priority to criminal enforcement actions concerning companies with total United States wholesale or retail sales of gasoline and other petroleum distillates exceeding $10,000,000,000 per year.
Section 3(c)(2)
Why it matters:This is a common legislative technique to guide enforcement discretion and focus resources. While not inherently evasive, it specifically targets large corporations, which might be less obvious to a casual reader than the general prohibition.
Case for: Proponents argue that prioritizing large companies ensures that the most significant market actors, who have the greatest potential for impact and influence on prices, are held accountable, maximizing the deterrent effect and demonstrating a commitment to addressing corporate misconduct.
Case against: Critics might argue that this creates a two-tiered justice system, potentially allowing smaller but equally egregious violators to escape criminal prosecution, or that it could be perceived as politically motivated targeting rather than equitable application of the law.
Estimated impact: This provision directs significant federal enforcement resources towards major fuel corporations, potentially increasing their legal exposure and compliance burden compared to smaller entities.
Amounts collected from penalties under this Act are deposited into a Consumer Relief Trust Fund and then used to provide assistance under the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program.
Section 3(e)
Why it matters:While a positive outcome for proponents, the specific allocation of funds might be less emphasized than the prohibition and penalties themselves. It's a common practice to detail the use of funds after establishing the source.
Case for: Proponents highlight this as a direct benefit to vulnerable populations, ensuring that funds derived from corporate misconduct are reinvested to mitigate energy costs for those most in need, thereby addressing the impact of high prices.
Case against: No direct opposition to this specific allocation is likely, though some might argue for broader or alternative uses of penalty funds, or question the overall effectiveness and administrative efficiency of these programs.
Estimated impact: This provision creates a dedicated, albeit variable, funding stream for critical low-income energy assistance programs, potentially increasing their capacity to serve more households.