The Messy Politics of Gasoline Prices

WASHINGTON (AllPolitics, April 30) -- Anyone who drives a car -- that is, most Americans -- appreciates the impact of a sudden spike in gasoline prices. People complain about $40 fillups and wonder about oil company collusion and price-fixing.

So, Republicans and Democrats alike are rushing to offer ways to ease the gas-pump pain and, inevitably in an election year, looking for partisan advantage.

First off the starting line: Congressional Republicans, who last week called for repealing the 4.3-cent-a-gallon federal gas tax approved in 1993.

Then on Monday, President Bill Clinton ordered the federal government to sell some of its stockpiled oil to try to moderate the price of fuel (160K WAV sound).

"I've been very concerned about this dramatic, although apparently temporary, rise in the price of gasoline at the pump," Clinton told a Democratic fund-raiser in Miami.

"It affects the take-home pay of working people who have to commute to work. It offers a great problem for tourism centers like Florida. We're about to get into the high driving season, and if gasoline is 20 percent higher, there are not going to be as many people driving as far to do whatever they're going to do this summer (160K WAV sound)."

Clinton's Republican challenger, Sen. Robert Dole, said the president was late in expressing his concern (192K WAV sound).

"Well, I think he's as political as the rest of us and I think he saw something that may be happening around here and he might want to get out in front, or at least try to get on board," Dole said.

"But having said that, I want to work with him. I want gas prices, if there's some reason they're high, if they're artificially high, then we ought to take a look at it," Dole said.

But analysts -- both people on the political side and those who study the oil industry -- say American motorists shouldn't confuse the political grandstanding with anything that will actually have much of an impact.

Dole's proposal to roll back the '93 tax would cut the price by only a few pennies and it runs counter to the Republicans' holy grail of a balanced federal budget.

Clinton's decision to permit the sale of 12 million barrels of the nation's Strategic Petroleum Reserve (SPR) is a symbolic, political move that lets the president say he has taken action, but it won't have much effect on prices either.

"The sale of SPR crude may see a kneejerk, downward reaction in the...markets in the short term, but the amount they're going to sell is such a drop in the bucket that it won't make any difference long-term or at the pump," Dean Witter analyst Elaine Levin told the Associated Press.

Said Philip Verleeger, an analyst at Charles River Associates in Washington, D.C.: "It's like trying to fight a forest fire with a few cupfuls of water." The 12 million barrels the U.S. plans to sell represents less than one day's supply for the nation's refineries.

Nationwide, gasoline averages $1.36 a gallon for self-service regular, but it has hit as much as $2 a gallon in some regions. Analysts say prices have shot up for several reasons, including refiners trying to build reserves for the summer and the lingering effects on the market of heating oil demand because of the long, cold winter.

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