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Pallone Says President Bush Must Demand OPEC Increase Oil Production to Lower Gas Prices

April 2, 2004
Press Release

"Gasoline prices have hit an all-time high -- the national average for gasoline is now $1.77 per gallon, up 25 cents from the beginning of the year -- and President Bush is doing nothing to alleviate the strain that this is taking on the American people, on American businesses and on the American economy.

"High gas prices impact all of usconsumers and businesses alike. High fuel costs translate into a loss in profit margins for the manufacturing and transportation sectors that force prices for products and services higher - hitting American consumers twice. Not only do American's need to dole out more cash to fill their gas tanks, with the little disposable income they have left they are forced to pay higher prices for goods and services. For instance, Continental Airlines sought to impose a fuel surcharge for their services. And the real impact of all this is a slow down in the economy with the potential for even more job loss.

"In fact, an estimate by Merrill Lynch shows that every penny increase in gasoline prices at the pump is equal to $1 billion in lost consumer spending. That's nearly $25 billion in lost spending since the beginning of the year.

"Furthermore, Merrill Lynch estimates that while federal tax refunds would total $55 billion from February to May this year -- a 30 percent increase from last year and theoretically giving the economy a nudge -- higher pump prices will wipe out as much as half of the positive economic impact these federal refunds might have had.

"I would like to point out too that this is happening on the watch of an Administration that said they would make energy policy a priority in the United States. Yet, more than three years after President Bush first stepped in the White House we have no national energy policy -- and we have no national energy policy because the bill that the White House presented to Congress was filled with an extraordinary collection of energy industry giveaways, crafted by the members of Vice President Cheney's SECRET energy task force, instead of meaningful policies that would increase fuel efficiency and the use of renewable and alternative energy sources.

"There are two things that President Bush must do immediately. First, he must hold off on placing more oil in the Strategic Petroleum Reserve until prices come down. The SPR ["SPRO"] is a power tool that the President can and should use in times of need - and right now consumers need relief. If President Bush reduced the amount of oil placed in the petroleum reserve we'd have more on the market -- driving prices down for Americans now. The SPR can then be replenished when oil prices are lower.

"And second, President Bush needs to get on the phone with OPEC and demand increased oil production. Recent news indicates that OPEC has hinted at plans to lower production by 1 million barrels per day after April 1, and the Administration's response to this from Secretary Abraham is that the U.S. "will not beg OPEC for oil". That's a different tune then the one candidate Bush sang during the 2000 election. Four years ago, on the campaign trail, President Bush, in a swipe at President Clinton, said, 'What I think the president ought to do is he ought to get on the phone with the OPEC cartel and say 'we expect you to open your spigots'and the President of the United States must jawbone OPEC members to lower the price.'

"Well, Mr. President, put your action where your mouth is and insist that OPEC increase production now to alleviate the strain these high gasoline prices are having on the American people and the American economy. We cannot afford to lose more jobs because of your inability to address this problem."