NEWS RELEASE:
April 07, 2008
Gallon of Regular Gasoline Spikes Nearly a Nickel in a Week, 17 Cents Since March 3
Refineries’ Profit Surge Comes On Top of Record Profits Reaped
From High Oil Prices; Group Asks, “Where’s the White House? Where’s
Congress?”
Santa Monica, CA — At the accelerating rate of increase in pump
prices, gasoline will soon cost over $4.00 a gallon in California and
other high-priced states, said Consumer Watchdog, urging Congress and
the White House to push investigations of oil trading speculation and
refineries’ deliberate cutbacks in gasoline production.
The House and Senate each held one committee hearing last week related
to energy prices, but much more is needed, said Consumer Watchdog
(formerly the Foundation for Taxpayer and Consumer Rights). The federal
Energy Information Administration’s weekly report of national average
prices for regular hitting $3.332 today, and diesel averaging $3.955,
should qualify as a “national economic emergency,” said the watchdog
group.
“Unlike ordinary consumers, Congress and the White House have amplified
voices that oil companies and energy speculators can hear,” said Judy
Dugan, research director of Consumer Watchdog and its Oilwatchdog.org
project. “Concerted warnings that these price spikes will bring
consequences could dampen the continuing leap in pump prices.”
New industry regulation would indeed take months at best to have a
clear effect, but a shot over the bow could be faster-acting, said
Consumer Watchdog, especially if the White House were to join hands
with Congress—unlikely as that might be.
“The major oil companies are almost certain to report another record
round of first-quarter profits in the next few weeks, yet their
refineries are reducing production well beyond what’s necessary for the
yearly switch to clean-air gasoline formulas,” said Dugan. “Refineries
are trying to throttle back faster than empty-pocketed drivers can cut
back their gasoline usage, in order to keep pump prices rising. Pump
prices have become a national economic emergency.”
The new round of record prices comes as gasoline consumption is
declining nationally from last year, according federal energy data. In
California, gasoline consumption has been down for the last seven
quarters, according to the state tax board.
Consumer Watchdog has called for:
– 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.)
Regulators should also 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.
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