Rise in gas prices worth investigating
Rising gas prices is an issue that impacts all Californians. Whether you drive a car, own a business, or buy groceries and other goods, you feel the pinch of higher gas prices. For months, both in Washington and in California, I have been focusing on the critical problem of rising gas prices.
Over the past three months, gasoline prices have spiraled out of control. Nationwide, the average price per gallon of gas has risen from $1.54 on January 5th to $1.88 on April 12.
Here in California, the price increase over this same period has been even sharper, from $1.61 to $2.15. In some areas of California, the price is much higher. In response to these rising prices, I have come up with a nine-point plan to fight rising gas prices. My plan includes:
1. FTC Investigation of Current Situation
First, I have called on the Federal Trade Commission to investigate the current gas price spikes in California, which began in mid-February. I have met with the chairman of the FTC, who confirmed that there was an “anomaly” in California’s gasoline market and that the FTC was conducting an informal investigation.
2. Automatic Investigations of Rapid Price Increases
Second, I have introduced legislation that would require an automatic investigation of the gasoline market for possible manipulation any time that average gasoline prices in a state increase by 20 percent or more over a three-month period. If the FTC finds market manipulation in a given case, they would work with the state’s attorney general to determine penalties to be imposed on the companies.
3. “Cease and Desist” Orders in Highly Concentrated Markets
I am cosponsoring the Gasoline Free Market Competition Act authored by Senator Wyden, which would give the FTC the authority to issue “cease and desist” orders in order to prevent market manipulation whenever four or fewer gasoline companies control more than 70 percent of the gas supply in a given market.
4. Strategic Petroleum Reserve
We need to stop filling the Strategic Petroleum Reserve – which is now at 93 percent of capacity – in order to increase the supply of gasoline on the market. We should also establish a short-term “exchange” in which some oil in the SPR is released immediately and refilled later, just as SPR reserves were released four years ago to ease the home heating oil crisis in the Northeast. It doesn’t even make sound economic sense to buy gas for the reserve when prices are at a peak.
5. Increased Production by OPEC
I am cosponsoring a Senate resolution that calls on the president to work with OPEC to increase world crude oil supplies in order to achieve stable crude oil prices. President Bush should work with OPEC to increase supply.
6. Subject OPEC to U.S. Anti-Trust Laws
I am cosponsoring a bipartisan bill authored by Senator DeWine that would subject OPEC to the laws prohibiting collusion, market manipulation, and other anti-competitive behavior.
7. Save the Bakersfield Refinery
I have called on Shell Oil to find a buyer for its Bakersfield refinery and commit to keeping the refinery open until a buyer is found. I have also asked the FTC and Attorney General Bill Lockyer to use their powers to stop the refinery from closing. We cannot afford to lose any more California refinery capacity. If this refinery closes, it will only further stress an already tight California market.
8. Oxygenate Waiver
Along with Governor Schwarzenegger, Senator Feinstein, and California’s bipartisan Congressional delegation, I have called on the EPA to grant California a waiver from the requirement that an oxygenate – MTBE or ethanol Ð be added to gasoline. Adding ethanol to gasoline may already be driving prices higher in some parts of the state.
9. Fuel Formula Investigation
We may be able to reduce price spikes by reducing the number of different fuel formulations now required by different jurisdictions. I have asked the General Accounting Office to investigate whether we can do this while maintaining the same air quality benefits that we get with California’s cleaner burning gasoline.
I believe that these steps, if implemented, would go a long way toward easing gasoline price spikes in California and preventing further price gouging in the future. If you have questions about any item on my 9-point plan or if you would like to send me any other idea, I encourage you to contact me at http://boxer.senate.gov/contact/webform.cfm
– Barbara Boxer is a United States senator from San Francisco.