by John M. Curtis
(310) 204-8700

Copyright April 23, 2006
All Rights Reserved.

iving the oil industry the green light to gouge consumers, the White House refused to take decisive action against America's oil monopoly. Dragged before Congress, the oil industry plays the same broken record that there's nothing that can be done to stop spiraling prices. Traders on the New York Mercantile Exchange find any excuse to bid oil prices into the stratosphere. Yesterday, it was China's insatiable appetite for oil. Today, it's the lack of refining capacity. Tomorrow it will be some other unforeseeable event to hike oil prices. President George W. Bush warned it's going to be a “tough summer,” watching the price of oil and current pump prices break new records. Talking about drilling in the Alaska National Wildlife Refuge or converting to alternative fuels, like ethanol, won't stop Big Oil's monopoly and stranglehold on the U.S. economy.

      Global jitters about a looming confrontation with Iran over its refusal to suspend uranium enrichment have left commodities like oil and precious metals going through the roof. With the summer driving season rapidly approaching, Bush tried to preempt more bad news, already pounding his approval ratings into mulch. “We're going to have a tough summer because people are beginning to drive now during tight supply,” said Bush, failing to mention how U.S. refiners shut down last month for “routine maintenance,” retooling to make summer-driving fuels. For the White House, it's always the same excuse: Demand can't keep pace with limited refining capacity. When Califorrnia ran out of electricity and was fleeced by power companies in 2000, Bush and Vice President Dick Cheney insisted that the state caused its own problems, building too few power plants.

      When the dust settled, power companies admitted to deliberately taking power off line to cause shortages and blackouts. Today's skyrocketing oil and pump prices are no different. Bush insists too few refineries cause the shortages and runaway prices. Before U.S. refiners went off line last month for “routine maintenance,” supplies were strong, causing pump prices to drop. One month later, supplies dwindled, causing the latest price spike. “The American people have got to understand what happens elsewhere in the world affects the price of gasoline you pay here,” said Bush, refusing to admit how the oil industry manipulates the market. While there's little Bush can do to control the rise in global oil prices, he's capable of telling U.S. refiners to stop playing games with pump prices. Oil executives have to take more responsibility for taking refiners off line to deliberately reduce gasoline supplies.

      Spiraling gasoline and diesel fuel prices hurt the economy by increasing the prices of landed goods. It's impossible to ferret out energy prices from core inflation, since all goods require common carriers for delivery, mainly trucks and trains. Transportation companies either pass on added fuel costs or face bankruptcy. While there's some relationship between the price per barrel and gasoline, pump prices are more linked to refining capacity and gasoline inventories. Taking refineries off line shrinks supplies causing today's spiraling pump prices. World oil prices spiked Friday at $75 a barrel, driving oil companies to raise pump prices to record levels. When Katrina hit New Orleans and the Gulf Coast Aug. 28, 2005, pump prices doubled overnight in Atlanta, where there were no supply problems. Dramatic price jumps can only be attributed to manipulation, not supply and demand.

      Oil companies had no problem justifying record profits before congressional committees. When everything pointed to blatant market manipulation during Katrina, oil company executives justified massive price increases as a form of conservation. It's not the oil industry's responsibility to gouge consumers to manage supply problems. Market forces, not arbitrary manipulation, should set pump prices. “We've got a real problem when it comes to oil. We're addicted, and it's harmful to the economy, and it's harmful for our national security,” said Bush, diverting attention away from the real problem behind runaway gas prices: Unbridled manipulation by big oil companies. As long as the White House colludes with the oil industry and does nothing, consumers can expect an economic roller coaster. Blaming the problem on consumers' addiction to oil is outrageous.

      Bush must work with Congress to curtail the oil industry's egregious market manipulation and insatiable appetite for profits. Profiteering at the expense of consumers fuels inflation and hurts the economy. Bush should stop making excuses for the oil industry and use the same tough diplomacy as he does with Iran to exact more compliance and concessions. You can't blame today's runaway pump prices on the price of oil, or, for that matter, on exorbitant bonuses paid industry executives. Allowing refiners to arbitrarily go on hiatus opens the door obvious market manipulation. Blaming shortages on reformulated gasoline perpetuates the same myths, allowing the oil industry to gouge consumers. No industry should be allowed to fleece consumers, record obscene profits and plunder the economy. More fuel efficiency and alternative fuels won't stop the oil industry from taking advantage.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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