New legislation from Iowa Senator Chuck Grassley aims to tackle alleged oil price-fixing by OPEC, the Organization of Petroleum Exporting Countries. Grassley says the bill would authorize the Department of Justice and the Federal Trade Commission to sue oil cartel members for antitrust violations.
While gasoline prices peaked just over $4 a gallon in Iowa last summer, pump prices are now averaging less than half that — but Grassley says this bill has nothing to do with the current costs for fuel.
"It deals with a subject that you ought to take into consideration whether you have high prices or low prices — protection of the consumers," Grassley says. "We have antitrust laws domestically to make sure that the free market system works."
The bill is called NOPEC, for No Oil Producing and Exporting Cartels. Grassley says it would spell out that courts would have the power to rule on antitrust charges brought against foreign governments for taking part in illegal pricing, production and distribution of petroleum products.
Grassley says, "What we’re doing in the NOPEC bill is applying the antitrust laws to OPEC nations to make sure they don’t get in cahoots to fix prices, which basically is what they do, like a month ago when they decided to quit pumping another two-million barrels of oil." Putting an end to illegal pricing is long overdue, Grassley says, as the U.S. is entering a new energy era. He says OPEC needs to know the U.S. is committed to stopping the anti-competitive behavior.
Grassley notes OPEC is an 11-member group that accounts for more than two-thirds of the world’s crude oil reserves. "It’d be just as bad as if you had Exxon and Chevron meeting and have their CEOs say, ‘This is what we’re going to have for the price of gas,’ the two companies, and they agree to it," Grassley says.
"They would go to jail for doing that, so shouldn’t the same principles be applied to OPEC as well?" He says OPEC nations need to see that the U.S. will not tolerate their "flagrant antitrust violations."