State legislatures push to curb rising gas prices

Wednesday, April 4, 2012 | 6:00 a.m. CDT

JEFFERSON CITY — Against a backdrop of rising gas prices and looming elections, state lawmakers are looking for ways to be seen as siding with frustrated consumers, including an effort in Missouri that would force gas stations to give 24-hours' notice before raising prices by 3 cents or more per gallon.

The Missouri legislation is one of several creative, angst-inspired proposals being floated in state capitols as lawmakers look for ways to provide election-year relief from gasoline prices that are nearing a national average of almost $4 a gallon. One South Carolina lawmaker is proposing to cap gasoline prices, while officials in some other states want to cut gas taxes.

A hearing was held on Missouri's proposal Tuesday in a House committee. The proposal wouldn't prevent prices from going up but would at least help families plan when to purchase, said sponsoring Rep. Ray Weter, R-Nixa.

"Everybody talks about them (gas prices), but nobody does anything about them," Weter said. "I think I could do a little bit of something about them."

But many critics and economists say there's actually very little, if anything, lawmakers can do to put a real dent in gas prices.

Joseph Truek, the dean of the School of Business and Economics at Lynchburg (Va.) College, said consumers might be looking to their elected officials to take action on gas prices, but state lawmakers can't fully control the market movements or find enough room in cash-strapped budgets to cut gas taxes.

"Gasoline prices, in a very visible and immediate way, impact the consumer," Truek said. "It hits them right in the pocketbook. Ultimately, there's very little they (lawmakers) can do."

That's not stopping many officials from trying. Connecticut Gov. Dannel Malloy signed a measure Tuesday that caps the state's tax on the wholesale price of gasoline, a move that's projected to save consumers 1 or 2 cents on each gallon they buy. But motorists there shouldn't expect to see lower prices at the pump any time soon.

Eugene Guilford, president of the Independent Connecticut Petroleum Association, said the average wholesale price of regular unleaded gasoline in the state jumped 6.6 cents per gallon from Monday to Tuesday. That would erase the expected 1.7 cents-per-gallon benefit from capping the gross receipts tax when wholesale prices hit $3 a gallon.

"I think it's important for state governments to be responsible and not be piling on consumers with Big Oil," said Rep. Joe Taborsak, a Democrat from Danbury, Conn. "It's probably not as much relief as some people would like, but it does help."

In South Carolina, Democrat Sen. Dick Elliott, of North Myrtle Beach, has filed legislation that would cap prices at the level they were at June 1, 2011, until June 2012. The average retail price of gasoline in South Carolina was about $3.48 per gallon in June 2011. As of Tuesday, it was about $3.66 per gallon.

The measure has not been debated in the state's heavily-Republican Legislature, and oil advocates say the state measures could result in shortages in some areas without putting a dent in prices.

John Felmy, chief economist for the industry group American Petroleum Institute, said posting advance notice of price increases would motivate most people to purchase their gas the day before. And if lawmakers capped the price of gasoline somewhere, oil companies might decide to simply sell elsewhere where market prices are higher.

"Price controls don't work," he said. "Whether it's wholesale or retail, if the market's not allowed to work, what you're going to do is cause panic."

Hawaii did enact caps on the wholesale price of gas in 2005. But the caps were repealed the next year after the state found that island drivers were actually paying more than that they would have, because gas stations were charging the maximum amount allowed under the caps instead of the market price of the gas.

Other state governments are looking at reducing their share of the cost of a gallon gas.

Alaska Gov. Sean Parnell has been pushing for a two-year suspension of the state's 8 cent-per-gallon gas tax, but that idea has stalled, with critics saying the tax provides much-needed cash for roads.

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