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Tax Refunds Going to Gas Tanks | Oil Watchdog

Press Release

Tax Refunds Going to Gas Tanks


Mon, May 12, 2008 at 4:06 pm

    Tax Refunds Going to Gas Tanks

    Gas Up 11 Cents In Week, 34 Cents In a Month; Consumers’ Tax Incentive Going Straight to Gas Tanks

    White House Scorns Action, Congress in Gridlock as Soaring Prices Push Inflation, Motorists Cry ‘Uncle’


    CONTACT: Judy Dugan, 310-392-0522, ext. 305, or cell: 213-280-0175

    May 12, 2008

    Santa Monica, CA — An 11-cent rise in gasoline prices in one week will
    put the reins on consumers who would like to spend their $300 to $600
    federal tax incentive on something frivolous, like an extra sack of
    groceries or repairing the roof, said the nonprofit, nonpartisan
    Consumer Watchdog today. The pain of prices at the pump is only made
    worse by government’s inaction to curb the financial speculation that
    is driving oil prices and profiting oil companies at the expense of the

    The federal Energy Information Agency reported today that the price of
    regular gasoline was at $3.722, up from $3.613 a week a go and $3.389
    four weeks ago. Diesel’s rise was even higher, from $4.149 to $4.339 in
    a week.

    “Gasoline prices alone are making drivers cry ‘uncle,’ but diesel costs
    may be an even larger hit on family budgets,” said Judy Dugan, research
    director of Consumer Watchdog (formerly The Foundation for Taxpayer and
    Consumer Rights). “Farmers are having to pass through diesel and
    petroleum-based fertilizer costs, while truckers and shippers face a
    choice between bankruptcy and passing along the cost of their $600
    fill-ups. It’s a no-win for everyone except energy traders and oil

    Consumer confidence is at modern lows, noted the watchdog group, and
    credit card debt is rising due to both fuel prices and food costs.

    “Congress has put forth a bucketful of proposals, but even a modest
    plan to put some oversight on out-of-control energy trading faces a
    White House veto, because it’s stuck inside a farm bill that the
    president dislikes,” said Dugan. “The Senate can’t even get it together
    to cancel some of the oil companies’ unnecessary taxpayer subsidies.
    It’s like forcing the cleaning lady to pay a yearly bonus to her CEO

    (See more on Consumer Watchdog’s assessment of White House and Congressional proposals here.)

    Consumer Watchdog urged Congress to move swiftly on a resolution urging
    the White House to stop using taxpayer funds to fill the federal
    Strategic Petroleum Reserve with record-priced oil. Spiking fuel prices
    and economic insecurity currently make selling some of that oil a
    better national security priority. Just halting purchases for the
    reserve would reduce fuel prices at least slightly and possibly
    substantially, said Consumer Watchdog. Estimates of the effect range
    from 3-5 cents a gallon to over 20 cents a gallon.

    “It’s crucial for government to move faster on more sources of
    renewable energy, and better public transportation, but it’s just as
    important to give help consumers stuck with an auto-based economy until
    alternatives are in place,” said Dugan. “Calls in some corners for
    $10-dollar gasoline as a way to bring down consumption ignore the
    disaster that this would be for the working and middle classes.”

    Consumer Watchdog’s proposals for bringing down fuel and energy prices
    while encouraging stronger development of renewable energy include:

    – Action by President Bush to stop adding to federal Strategic
    Petroleum Reserve and sell from the reserve to stabilize and drive down
    oil futures price.  (Read Consumer Watchdog’s letter to the White House here.)
    – Closure of 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 regulate trading markets to help stop
    speculative oil pricing. This measure was inserted in the federal farm
    bill, which Bush has vowed to veto. The regulatory bill should be
    reintroduced on an emergency basis as a stand-alone bill. Regulators
    should separately  increase the amount of margin funds that most
    traders must put up in energy markets to help suppress speculation. (See more on Enron loophole and farm bill here.)

    – Senate approval of an alternative fuels bill (HR 5351) 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 block
    passage. A similar House measure was removed from the federal energy
    bill by the Senate last year under pressure from the oil lobby.
    – 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 gasoline production.
    – 30 –

    Consumer Watchdog (formerly The Foundation for Taxpayer and Consumer
    Rights) is a leading nonprofit, nonpartisan consumer advocacy

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