Clinton worried about gas price jumpMSNBC
June 16 ? President Clinton said Thursday he is concerned about the recent surge in gasoline prices in the Midwest and has told the Federal Trade Commission to find out why gasoline costs so much more there than elsewhere in the U.S
IN AN INTERVIEW on NBC?s Today show, Clinton said the surge in Midwest gas prices is ?very frustrating.? But he said it?s not clear if any price gouging is going on.
?I?m very worried about it,? said Clinton.
Refiners have put much of the blame for the price spike on a new, clean-burning gasoline they?re now required to sell. Other factors blamed by the companies include a surge in demand, a refinery shutdown and a pipeline leak.
Those explanations have been dismissed as inadequate by the White House and Midwestern lawmakers. Clinton says that should only add five to six cents a gallon ? while prices in Chicago and Milwaukee have surged 30 to 50 cents.
House Speaker Denny Hastert, an Illinois Republican, said he was anxious to hear the oil companies? reasons for the high Midwest gasoline prices at a meeting next week.
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The forum for that will be a private meeting with representatives from the Clinton administration and lawmakers from both parties, he said. Asked about the allegation that oil companies are deliberately inflating prices, Hastert said: ?We don?t know that that?s a fact.?
On Thursday, EPA Administrator Carol Browner said she and Energy Secretary Bill Richardson asked federal antitrust regulators for an ?expedited? review of gasoline prices that have rocketed higher in Chicago, Milwaukee and other Midwestern cities.
As part of its new probe, the FTC could issue subpoenas to oil companies to obtain information. The investigation is likely to take several six weeks.
High prices prompted Illinois Gov. George Ryan Wednesday to request a temporary waiver from the government?s stringent reformulated gasoline (RFG) requirements. But Browner said there were difficulties meeting that request and it was not clear it would provide relief.
DIPPING INTO RESERVES
June 12, 2000
Steven Strongin, commodities analyst at Goldman Sachs, says that crude oil prices could hit $40 a barrel, which would cause further increases in gasoline prices.
The Clinton administration separately took the rare step of loaning 500,000 barrels of crude oil from the nation?s emergency stockpile to Citgo Petroleum Corp.?s sprawling refinery in Louisiana. A marine accident near the refinery has disrupted incoming crude oil supplies, and Citgo said it would have to sharply reduce gasoline production unless it could obtain crude oil quickly.
Browner said tight supplies are not the reason for the high gasoline prices. Total gasoline stocks in the Midwest are 650,000 barrels higher than last year.
Despite promises by the Organization of the Petroleum Exporting Countries that it would keep a lid on prices, crude oil surged to near record levels this week on recent fears that the cartel won?t increase supplies at its June 21st meeting. The higher U.S. retail gasoline prices are certain to figure into OPEC?s analysis of global oil demand when the cartel meets next week to decide if it should pump more crude oil.
OPEC had been expected to increase supply by 500,000 barrels a day last week, based on an agreement reached in March to boost output if the average 20-day price of OPEC oil topped $28 a barrel. Prices have risen well beyond that level. Crude oil futures prices hit nearly $33 a barrel Wednesday, but eased Thursday. U.S. light crude for July was off $1.15 at $31.80.
Browner said that the average price for regular gas in Chicago and Milwaukee on June 12 was $2.04 per gallon; the average nationwide was $1.62. In cities where cleaner-burning fuel is required - excluding Chicago and Milwaukee - it was only $1.63.
Despite the higher prices, Americans show no signs of taking their foot off the gas pedal for the peak summer driving season. The American Automobile Association reports that higher gas prices haven?t curbed travels plans that include car trips.
June 13, 2000
Fadel Gheit, oil analyst at Fahnestock, and Jerome Castellini, president of CastleArk Capital Management, say that oil prices will keep rising, and advise investors on strategies to profit from the high prices.
?We are still running ahead of last year,? said AAA spokesman Geoff Sundstrom. ?We?ve got clubs reporting increase of about 10 percent over a year ago, which was quite strong.?
FURTHER MEETINGS PLANNED
The administration and a bipartisan group of lawmakers intend to meet with representatives from the oil refiners again next week, Browner said. The EPA and Energy Department met with officials from eight major oil refineries on Monday.
FTC spokesman Mitch Katz said the agency had assigned several lawyers to the issue, but that no formal investigation had begun.
?We?re limited to looking into the potentially anti-competitive effects,? Katz said.
Also Thursday, the White House ordered the Transportation Department to look into whether supply problems are contributing to the problem, White House spokesman Jake Siewert said.
Lawmakers left the meeting with Browner clearly frustrated. Some blamed the EPA?s stricter clean-air regulations and some blamed the oil industry, but none knew of a way to provide immediate relief.
Drivers wait for hours for free gas
?I don?t think anybody knows whether it?s the oil industry, the ethanol industry or the pipeline industry,? said Rep. James Sensenbrenner, R-Wisc.
The oil industry say factors include a patent dispute over the process to make the new reformulated gas, a major pipeline break three months ago, the start of the high-demand summer driving season, and higher costs for crude oil.
But Sen. Dick Durbin, D-Ill., and a few others said the industry is gouging the public.
?It?s an increase directly attributable to profit-taking by the oil companies,? Durbin said.
Hastert said he hasn?t yet reached that conclusion but expects to learn more next week.
The reformulated gasoline program requires fuel sold in the nation?s most-polluted cities to be blended with an oxygenate that makes it burn cleaner. Tighter pollution-reduction goals this year require ethanol, which is used in Chicago and Milwaukee, to be mixed with a more expensive gasoline, and some are blaming that for the soaring prices.
The Associated Press contributed to this report.
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