U.S. Price Also Near Record; Group Demands Curbs on Speculation, Action on Oil Subsidies
Santa Monica, CA — Spiking gasoline prices are pushing through
state and national records, months shy of their usual peak, said the
Foundation for Taxpayer and Consumer Rights (FTCR), while oil profits
head toward new highs. FTCR called on Congress today to act quickly on
pending legislation to control speculation in energy markets and speed
development of alternative fuels.
Inexorable price increases today drove California within half
a penny of last May’s all-time record price of $3.49 a gallon per AAA,
as U.S. prices topped $3.16, only six cents shy of the national record.
Oil speculators also drove prices to an all-time record, even adjusted
for inflation, of $103.95 per barrel of crude oil.
"With gasoline prices averaging more than a penny-a-day
increase, there is almost no way the state can avoid $4.00 a gallon
gasoline this spring," said Judy Dugan, research director of FTCR and
its OilWatchdog.org project. "The rest of the country won’t be far behind, and consumers are rightly screaming for relief."
The situation with diesel fuel is even worse, said FTCR. It is
setting new record highs every day, hitting $3.674 today nationally and
$3.899 in California.
"The price of diesel is translated into price increases on
both food and manufactured goods, from cereal to clothing, as truck
drivers are forced to add ever-higher fuel surcharges," said Dugan.
"Yet national and international demand for oil is down or flat, and
there is no shortage. There is nothing, not the weak dollar, not
recession fear, not international unrest, that can justify oil at
Today’s oil price is nearly twice the $55-dollar-a-barrel
reached right after Hurricane Katrina in 2005, which analysts even then
called speculator-driven, said FTCR. On top of that, refineries have
been cutting back production in hope of getting bigger profits on
gasoline. The result is a battering of consumers and the economy, as
families run up their credit card debt just to buy gasoline and
economists fear the worst of all possible outcomes, "stagflation."
The beneficiaries of this are oil companies and foreign oil producers reaping record profits, said FTCR.
FTCR and OilWatchdog call for:
– Swift action in Congress on pending legislation to regulate
hedge fund speculators driving the price of crude oil to irrational
heights. A Senate amendment that would require oversight of
unregulated, Wild West-style energy futures markets was attached to the
farm bill, but that bill is now stuck for months in a conference
committee. The measure should be passed again as a separate bill (S.
2058 by Democratic Senators Dianne Feinstein and Carl Levin) to close
the so-called "Enron Loophole" that allows speculation, not demand, to
drive oil prices.
– 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. "The current
prices show the urgency of reducing our dependence on petroleum, and
that can happen only with a strong federal program," said Dugan. "The
Senate must not block it again."
– Pledges by presidential candidates to refuse oil industry
contributions. "Oil money is dirty money, and as bad as tobacco money,"
said Dugan. "Today’s presidential candidates have to prove they’re
ready to make the White House more than an extension of the Houston
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