April 21, 2008
Contact: Judy Dugan, 310 392-0522, ext. 305
White House Silence, Inaction on Pump Price Spike is Opposite of Bush 2006 Response, Says Group
Consumers, Economy Are Buckling Under Gasoline and Diesel Price Records As Government Stays Mum
The 16-cent national rise in gasoline prices over two weeks, to more than $3.50 a gallon on average, is busting family budgets and threatening a further downward spiral in the economy, said Consumer Watchdog. The price crisis is far worse than it was two years ago, yet President Bush has remained silent, refusing to make even the small effort that he did in April 2006 against spiking prices.
"The situation now is much more dire, with price leader California brushing $4.00 a gallon for gasoline and $4.50 for diesel fuel," said Judy Dugan of the nonprofit, nonpartisan Consumer Watchdog (formerly The Foundation for Taxpayer and Consumer Rights). "Yet the White House has refused to take even the modest actions-including a cap on the Strategic Petroleum Reserve-that President Bush announced with fanfare in April 2006. This foot-dragging is unconscionable."
(See White House fact sheet on April 25, 2006 actions here.)
In addition, the White House should regulate gasoline supplies on hand, nationally and regionally, to curb the supply reductions that, along with oil prices, are driving prices at the pump, said CW.
At the end of April in 2006, the national average pump price was a "mere’" $2.96 a gallon for regular and $2.88 for diesel, according to federal Energy Information Administration figures, said Consumer Watchdog. This was an emergency for the White House two years ago, and the situation is much worse today. Energy prices are driving inflation, slowing the economy and putting a crushing debt burden on drivers, said Consumer Watchdog.
"President Bush should be acting with every shred of his influence to not only bring down pump prices, but to quell the financial speculation in energy markets that is driving up those prices," said Dugan. "He can begin immediately by backing regulation that would bring energy trading into the sunshine of public view, and by making such trades cost more to the traders. He should be releasing oil from the petroleum reserve, not using tax money to buy more."
Instead of taking action, said Consumer Watchdog, the White House has even opposed cuts to the oil industry’s taxpayer subsidies, as proposed by Congress, to back renewable energy research and development.
"The major oil companies are almost certain to report another record round of first-quarter profits starting this week," said Dugan, "They have absolutely no need for incentives that come from taxpayers’ pockets."
Gasoline consumption continues to declining nationally, according federal energy data, and is falling even more sharply on a per capita basis, said Consumer Watchdog. Yet oil refineries are throttling back faster than empty-pocketed drivers can cut back their gasoline usage, said Consumer Watchdog, in order to keep pump prices rising.
Consumer Watchdog has called for:
- White House action to stop using taxpayer funds to add to the Strategic Petroleum Reserve, which is still growing at a rate of 1.5 million gallons a month and is at near-record highs above 700 million gallons total. President Bush should also release oil from the reserve into the market, to help quell speculative price spikes.
- Closing the Enron Loophole in commodity trading regulation. A regulatory measure in the federal farm bill (S.2058 by Sens. Dianne Feinstein and Carl Levin) would help stop speculative oil pricing. This measure is stuck in a fight over other subsidies in the House-Senate conference committee. (See more on Enron Loophole and farm bill amendment here.)
- Increase the amount of margin funds that traders must put up in energy markets to help suppress speculation.
- Senate approval of an alternative fuels bill funded by withdrawing $1.8 billion a year in unjustified taxpayer subsidies to oil companies. This measure, passed by the House, has not been taken up in the Senate, where opponents are using a filibuster tactic to require 60 votes for passage. A similar House measure was removed from the federal energy bill by the Senate last year under pressure from the oil lobby. (Find text of HR 5351 here.)
- Oversight of refinery operations, including regulation of national gasoline supplies. In the last decade, the average on-hand supply of gasoline has dropped from 30 days’ worth to about 22 days. This makes prices increasingly sensitive to any cuts in production. Only government regulation to control the supply of gasoline, nationally and regionally, will keep supplies adequate to control prices.
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