With the Brent crude oil barrel price at more than $75 (£41), politicians are under pressure to relieve the burden on citizens' pockets. In the past month, the US Congress has proposed a number of actions intended to respond to the public's concerns over the rising prices of gasoline.

The Senate Judiciary Committee has approved the Oil and Gas Industry Anti-trust Act 2006. If passed into law, this Act will allow lawsuits against the Organisation of the Petroleum Exporting Countries (OPEC) for conspiring to control output and fix prices, while simultaneously outlawing legitimate joint ventures between oil companies and state-owned oil companies and amend the Clayton Act to prohibit unilateral decisions to refuse to sell, or to withhold or divert, petroleum products "with the primary intention of increasing prices or creating a shortage".

In addition, the House of Representatives recently passed the Federal Energy Price Protection Act 2006 to penalise gasoline price gouging (that is, artificial inflation of prices).

All of these measures appear to be based on antitrust law considerations, but these are not necessarily appropriate or consistent with the generally accepted objectives of antitrust laws.

Oil cartel

It is an undeniable fact that OPEC is a cartel, that is, an agreement to increase prices: OPEC establishes the oil production quota of its members, to enable control of the barrel price. Price conspiracies are prohibited by antitrust regulations, such as the Sherman Act of the US and the Treaty of the European Union. In both cases the cartel could, in theory, be prosecuted by such rules, as OPEC agreements come into effect in the US as well as in Europe.

Then why are these rules not applied to OPEC? It is because several legislative and judicially-created doctrines provide that the antitrust laws do not apply to, as in the case of OPEC members, the activities of countries acting within their respective governmental competence.

This includes decisions regarding the allocation of their natural resources. The proposed Oil and Gas Industry Antitrust Act of 2006 would strip OPEC member states of the protection for the 'act of state' and 'sovereign immunity' doctrines, as they are known.

The proposed legislation is based on the assumption that natural law is the basis of antitrust law. The challenge is to make it practically enforceable by requiring an international agreement or, at least, the firm decision of the US to apply a law that might affect commercial relations with third-party countries.

Until now, similar measures approved by the Senate have not obtained the support of the White House.

Unfortunately, the Act also would outlaw most legitimate joint venture activities among state-owned oil companies and private firms. That is because the Act would make it illegal for any state (including state-owned oil companies) and "any other person" to act collectively to:

. limit the production or distribution of oil;

. set or maintain the price of oil; or

. otherwise take any action in restraint of trade for oil.

"Any other person" would include any private firm that engages in a joint production and/or sales venture with a state-owned oil company, although the vast majority of these are efficiencyenhancing endeavours. From an anti-trust perspective, this prohibition is simply wrong. The US Supreme Court has recently decided that these are activities in which legitimate joint ventures engage ( Texaco v Dagher), and the fact that one parent company is a state-owned company does not invalidate the legal and economic rationale of this analysis.

In fact, this prohibition will outlaw those joint ventures that are necessary and the only means by which certain resource-rich states can gain access to the knowledge and technology necessary to engage in exploration and production activities.

The Oil and Gas Industry Antitrust Act 2006 also has proposed to amend the Clayton Act (which allows for private rights of action) to make it unlawful to refuse to sell, or to withhold or export, petrol and natural gas "with the primary intention of increasing prices or creating a shortage in geographic market".

This proposed amendment to the Clayton Act runs counter to the general direction and objectives of antitrust law in several respects.

First, intent-based standards are inconsistent with an economic approach to antitrust. Second, in marketplaces, goods are sold to the buyer who offers the best price, so the Clayton Act amendment would outlaw many legitimate pricing decisions. This amendment might be considered as an illegal trade barrier or, even worse, a price control mechanism.

Price gouging

The proposed Federal Energy Price protection Act, passed in the House of Representatives recently, requires the Federal Trade Commission (FTC) – together with the Department of Justice and the US antitrust watchdogs – to define, investigate and penalise gasoline price gouging.

Gas price gouging is already prohibited in more than half of all states, but most only apply to the practice when it occurs during natural disasters.

A number of states, including New York and New Jersey, have taken enforcement actions against several retailers for engaging in price gouging in the immediate aftermath of Hurricane Katrina.

The proposed federal legislation would prohibit price gouging at any time and would require the FTC to determine what constitutes price gouging. The FTC would have primary responsibility for enforcing the law, which would allow for fines of up to $150m (£82m) and imprisonment of up to two years.

The proposed Act, however, raises several problems. First, this legislative activity occurred against the backdrop of the FTC undertaking two Congressionally-mandated comprehensive studies of the oil and gas industry and pricing activities within the industry.

Second, if this bill is passed into law, it will be difficult for the FTC to define price-gouging without actually setting oil prices, which is incompatible with market-driven economies. The testimony of FTC chair Deborah Platt Majoras on gasoline prices before the US Senate in November 2005 is very clear on this point: "Price gouging laws that have the effect of controlling prices likely will do consumers more harm than good."

In fact, the FTC has probed this industry several times and, up to now, the results have been similar; each time, the FTC has concluded that higher prices were not the result of anticompetitive conduct, but rather of market-driven conditions.

Therefore, although it is the task of lawmakers to pass measures responding to citizen concerns, it should not be forgotten that antitrust laws are not destined to change how the markets work, but rather serve as a tool to ensure that they work efficiently, something that seems to happen in the oil industry. Market analysts agree that actual prices respond, among other conspiracy-free reasons, to an increase in demand from China and India, and threats to supply, including unrest in Nigeria and problems with Iran.

Raimundo Ortega Bueno is a senior associate in the antitrust practice at Jones Day in Madrid.