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Record Prices Hammer Economy | Oil Watchdog

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Record Prices Hammer Economy


Mon, Mar 10, 2008 at 1:56 pm

    Record Prices Hammer Economy

    March 10, 2008

    CONTACT: Judy Dugan, 310-392-0522, ext. 305, or Jamie Court, ext. 327

    Daily Record Prices for Oil, Gasoline Hammer Consumers and U.S. Economy

    Group Calls for Swift Action to Curb, Regulate Energy Speculators, ‘Today’s Enron Rogues’

    Santa Monica, CA — Congress and President Bush must take joint
    action against the speculators who have driven oil and gasoline prices
    past all-time records, said OilWatchdog.org, a project of the
    Foundation for Taxpayer and Consumer Rights. Gasoline prices nationally
    are expected today to surpass last year’s record of $3.227, and
    California, at $3.571 per gallon as calculated by AAA, is more than 7
    cents a gallon over last year’s record.

    "There is no shortage of gasoline, no shortage of crude oil,
    no underlying market reason for these excruciating record prices," said
    Judy Dugan, research director of OilWatchdog and the nonprofit,
    nonpartisan FTCR. "Speculators and hedge funds, today’s Enron rogues,
    are driving an economic disaster by pouring billions into bets on
    continually rising prices."

    Oil today spiked to more than $107.00 a barrel, though the
    U.S. dollar stabilized in value against other currencies including the
    Euro. A weak dollar, in any case, is not nearly reason enough for spot
    oil prices to be more than double last year’s January low of just above
    $51 a barrel, said OilWatchdog. Last March, as gasoline prices started
    spiking to their previous record, oil was still under $60 a barrel. (Click here to see historical oil prices.)

    "With gasoline prices averaging more than a penny-a-day
    increase, prices of $4.00 a gallon are popping up across California and
    other states can see their future in what is happening there," said
    Dugan. "Yet President Bush said earlier this month he hadn’t even heard
    about predictions of $4.00 gasoline, and Congress seems to be hiding
    its head in the sand. Energy prices should also be atop the issues for
    the presidential candidates, but the oil lobby’s clout suffocates even
    that debate."

    Either the White House or Congress should initiate hearings on
    and investigations of unregulated energy trading markets, where
    manipulation of large trades can drive up prices on all markets, said
    OilWatchdog. A proposal to put some modest oversight and regulation on
    U.S. trades in the unregulated markets passed the Senate last December
    but it was folded into the federal farm bill, which is stuck in
    unrelated disputes over the funding of farm subsidies.

    "The electronic energy trading markets, including the
    InterContinental Exchange, are exempt from all regulation because of
    what’s called the ‘Enron Loophole’," said Dugan. "The same energy
    bandits who nearly turned out the lights in California in 2000 pushed
    aside federal regulation that could have spotted manipulation and
    curbed this year’s disastrous price spike. Government is still asleep
    at the wheel."

    Oil refineries have also been cutting back production, which
    spikes gasoline prices independent of oil prices. Families are running
    up credit card debt just to buy gasoline and the economy is battered
    from both sides by energy-caused inflation and recession, said FTCR.

    The beneficiaries of this, aside from the speculators, are oil
    companies and foreign oil producers reaping record profits, said FTCR.

    FTCR and OilWatchdog call for:

    – Swift action to close the Enron Loophole in commody trading
    regulation. The measure that is stuck in the farm bill should be passed
    again as a separate bill (S.2058 by Sens. Dianne Feinstein and Carl
    Levin) to help stop speculative pricing. (Click here to see more on Enron Loophole and farm bill amendment.)

    – 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 last week, faces an
    uncertain future in the Senate. A similar House measure was removed
    from the federal energy bill by the Senate last year under pressure
    from the oil lobby. (Click here to see text of HR 5351.)

    Statements of intent by the presidential candidates. Today’s
    presidential candidates must do more than make disapproving noises
    about today’s energy crisis, said OilWatchdog. They must let voters
    know how they plan to keep the oil lobby out of the White House and
    stop this from happening again.

    The Foundation for Taxpayer and Consumer Rights is a non-profit, non-partisan organization.

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