Plea To The Prez: Tap The Reserves

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Plea To The Prez: Tap The Reserves Senate Group Seeks To Lower Gas Prices Prices In Chicago & Milwaukee Well Over $2 Consumers Finding: More $ For Gas, Less $ For Other Stuff

SPRINGFIELD, Illinois CBS So far no one can explain why the price at the pump keeps going up. CBS No matter who or what is to blame for it, the fact is gasoline prices are high all over the U.S., especially in the Midwest.

In Congress there's a growing sentiment to get the prices down now, and find out the reasons for the increase later.

A bipartisan coalition of a dozen senators from the Midwest and Northeast called on President Clinton Friday to tap the strategic petroleum reserve to help lower oil prices.

Senator Charles Schumer of New York said the administration's efforts to get OPEC to lower prices haven't worked. And, in his words, "it's time to play hardball."

He and Maine Senator Susan Collins said the administration can't wait for OPEC to lower prices.

They said OPEC hasn't kept its promise to automatically lower prices if the price of crude oil closes above $28 a barrel.

The price has been that high since early May and nothing has happened, except round after round of the "blame game."

Paying Price For Clean Air New EPA guidelines are in effect requiring 16 cities with poor air quality to sell cleaner-burning, reformulated gas. It costs more to refine, and with supplies tight, prices are soaring. The Environmental Protection Agency (EPA) blames the oil companies for the rise in prices, the oil companies blame the EPA and forces outside their control, and lawmakers are trying to figure out whom they can point the finger at.

"What we don't know is whether there was any price gouging," President Clinton said Friday.

Mr. Clinton said the Federal Trade Commission, the EPA and the Energy Department are looking into the problem. "I'm very worried about it," Mr. Clinton said on Friday. "But I'm hoping we can break the logjam on it soon."

Consumers are hoping so too, because as CBS News Correspondent Anthony Mason reports, they're finding that the more they have to spend on gasoline, the fewer of those precious disposable dollars are left for spending elsewhere.

Translation: Rising gas prices may be helping to put the brakes on an economy that's in overdrive.

Just this week, Winnebago, the recreational vehicle powerhouse, announced that rising gas prices and interest rates could slow it's sales.

A cooler economy is what Federal Reserve Board Chairman Alan Greenspan has been angling for with his recent boosts in interest rates.

But former Federal Reserve Governor Lyle Gramley thinks any slowdown may be just a rest stop.

"I expect a re-acceleration of growth in the second half. And I don't think the Fed is finished tightening yet," he said.

Whatever happens to interest rates, analysts say higher gasoline prices are here for awhile. Summer is rush hour at the pump and prices aren't expected to fall until the temperature does.

And while that might ease one problem, that's just about the time another one could kick in.

"If we do get a cold winter, I think we're in a tough spot," said Bruce Lanni, oil industry analyst with CIBC World Markets.

"You're going to see heating oil prices spike up just like you're seeing gasoline prices spike. So, it's just going to be a continuation of higher prices for the consumers," Lanni added.

So, as you head off on your summer vacation, maybe it's better not to look too far down the road.

In the meantime, Carol Browner, chief of the EPA, says the feds will keep trying to figure out why gas prices have skyrocketed.

She says preliminary investigations have failed to turn up an answer, but "right now Henry Hyde and his committee have asked the Federal Trade Commission to do an investigation into price gouging and see what the prices are, where they ought to be, and whether the oil companies are doing that."

http://cbs.aol.com/flat_story_198307.html



-- Martin Thompson (mthom1927@aol.com), June 17, 2000


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