Rising Oil Costs Revive Concerns Over Gas Price-Gouging

July 7, 2008 - 8:31 PM

(CNSNews.com) - As the price of crude oil reached record levels of over $70 per barrel on Tuesday, federal officials from both the Democratic and Republican Parties renewed calls to ensure that oil companies don't gouge consumers at the pump.

Light crude for May delivery on the New York Mercantile Exchange rose as high as $71.60 a barrel, passing the previous record of $70.85 set last August due to the devastation caused by Hurricane Katrina.

As a result, GOP and Democratic leaders moved quickly to assure voters that they will not allow oil companies to take advantage of the situation.

"I'm concerned about higher gasoline prices," President George W. Bush said during a news conference at the White House. "The government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging, and we will do just that."

The president listed a number of reasons for consumers' increased pain at the pump.

"It's a tight supply worldwide, and we've got increasing demand from countries like India and China, which means that any disruption of supply ... is going to cause the price of crude to go up," Bush said.

In addition, "at this time of year, people are beginning to drive more, getting out on the highways, taking a little time off," he noted. "That increasing demand is also part of the reason the price of gasoline is going up."

However, on the other side of the political aisle, several Democrats leveled accusations at two groups for the recent increase in gasoline prices: oil companies and Republicans.

"As Americans pay almost 90 percent more to fill their gas tanks since President Bush took office, oil companies continue to reap gigantic profits and oil executives receive astronomical compensation," said House Minority Leader Nancy Pelosi (D-Calif.) in a press release.

"Record prices, record retirement packages and record profits are just the latest example of the wealthy few benefiting at the expense of hard-working Americans under the Bush administration," Pelosi added.

"The Republican Rubber Stamp Congress has passed two energy bills, costing taxpayers $12 billion for giveaways to big oil companies," she said. "But the Republican bills clearly have done nothing to lower gas prices.

"Democrats have a plan to lower gas prices, taking America in a new direction that works for everyone, not just the few," Pelosi said.

"Our plan would empower the Federal Trade Commission to crack down on price gouging to help bring down skyrocketing gas prices, increase production of alternative fuels and rescind the billions of dollars in taxpayer subsidies, tax breaks and royalty relief given to big oil and gas companies," she added.

A letter sent Tuesday by 15 Senate Democrats took a more conciliatory tone with the president, urging him to take action to support federal anti-price gouging legislation and renewing their call for a bipartisan energy summit to solve America's dependence on foreign oil.

Among those signing the missive were Sens. Joe Biden (Del.), Hillary Clinton (N.Y.), Richard Durbin (Ill.), Russ Feingold (Wis.), Dianne Feinstein (Calif.), John Kerry (Mass.), Joe Lieberman (Conn.) and Harry Reid (Nev.).

"We are writing to enlist your support in enacting strong consumer protection measures that will protect American consumers from price gouging at the gas pump this summer," the senators wrote.

"Already, price gouging legislation ... exists that has been cosponsored by nearly a third of the United States Senate and endorsed by a number of state attorneys general," the letter added.

"This legislation would give federal and state regulators new authority to prosecute price gouging in the wake of national energy emergencies, as well as put in place measures to ban manipulation and enhance the transparency of our nation's fuel markets," the senators noted.

"Our oil dependency is one of the greatest economic and national security challenges faced by our generation," the letter added. "The status quo -- in which the security of the United States and our domestic economy is left to the whims of foreign regimes and companies that do not have the best interests of our nation at heart -- is simply not an option.

"We hope you will join with us in acting quickly to protect American consumers from price gouging this summer and to vastly accelerate market penetration of biofuels, alternative fuels and energy efficiency vehicles and technologies," the senators wrote.

"We stand ready to work with you to develop a serious national strategy to curb America's dangerous dependence on oil," the letter concluded.

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