WASHINGTON (Dow Jones) -- President Bush is likely to veto legislation that would create hefty fines and criminal penalties for gasoline price-gouging, the White House said Wednesday.

The threat came as the House prepared to vote on a Democratic plan aimed at battling rising gasoline prices by requiring the Federal Trade Commission to define "price gouging." The bill would create fines and criminal penalties, including jail time, for industry executives found guilty of gouging.

The White House, in a formal statement of administration policy, said the legislation amounted to price controls that would hinder oil companies and retailers from responding to market signals, potentially worsening fuel shortages.

"Gasoline price controls are an old -- and failed -- policy choice that will exacerbate shortages and increase fuel hoarding after natural disasters, denying fuel to people when they most need it," the White House said, adding that Bush's senior advisers would recommend a veto of the House bill or any similar legislation that makes it to his desk.

The vote comes as lawmakers weigh a number of measures in the face of soaring gasoline prices. The House ignored a veto threat Tuesday to overwhelmingly pass legislation that would allow the Justice Department to sue members of the 11-nation Organization of Petroleum Exporting Countries, or OPEC, under U.S. antitrust laws.

Democrats defended the anti-gouging package, saying it provides safeguards aimed at protecting small businesses and taking account of supply disruptions created by natural disasters and other problems.

Republicans are "asking this congress to wait until a more perfect time ... to help the American consumer out," said Rep. Bobby Rush, D-Ill. "The American people are suffering right now and they are demanding this Congress take action right now. There can never be a more perfect time for this Congress to take action."

The bill's sponsor, Rep. Bart Stupak, D-Mich., added a provision to the bill that allows the FTC to pursue price-gouging only after the president has declared an energy emergency. A bill pending in the Senate has the same provision. Republicans said the addition of the provision was an effort to shore up support for the bill among oil-patch Democrats. The bill is being considered under special rules that require a two-thirds supermajority.