California Gasoline Price to Top All-Time Record As Crude Oil Price Nears $104

Spiking gasoline prices are pushing through state and national records, months shy of their usual peak, said the Foundation for Taxpayer and Consumer Rights, 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 $104.”

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 Sens. 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 oilmen’s association.”

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

Source: Foundation for Taxpayer and Consumer Rights

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