Wounds from gas prices suspicious, self-inflicted

www.gopbi.com Tuesday, February 18 Palm Beach Post Editorial Tuesday, February 18, 2003

Gas prices in South Florida are up about 45 percent from a year ago, but this is only the beginning. Industry analysts warn that with war in Iraq looming and the seasonal summer increases ahead, paying $3 for a gallon of regular is a possibility.

The American Automobile Association says it has found no evidence of price gouging, but Sen. Charles Schumer, D-N.Y., isn't buying that. He has asked the Federal Trade Commission for an investigation to explain why the national per-gallon average has risen 30 cents to $1.66 in just two months, and 13 cents in the past two weeks.

Typically, industry officials use the ever-popular broken-pipelines or burning-refineries excuse when such a spike occurs. This time, however, the explanations are more political and climatological: a strike in Venezuela, a cold winter that increased home heating oil demands, and the Bush administration's preparations for the campaign in Iraq. Analysts say crude oil supplies are at a 28-year low, so the higher prices make sense, despite Sen. Schumer's proper skepticism.

The nation has about 600 million barrels in its Strategic Petroleum Reserve stored underground in Texas and Louisiana. President Bush correctly has resisted the temptation to dip into the reserve to lower prices at the pumps. The reserve was created for emergencies such as shortages. Since Saddam Hussein, if attacked, may torch Iraq's oil fields, the nation may have to use its reserves soon enough.

It is hardly surprising that the Bush administration, with many personal and political ties to the oil industry, has done little to wean the nation from its overreliance on petroleum. But it is particularly disappointing that Congress has failed to do much more. Passenger vehicles have hit a 23-year low in fuel economy because lawmakers have refused to get tough with Detroit and toughen CAFE (Corporate Average Fuel Economy) loopholes. The government's light-truck exemption on fuel efficiency allows trendy SUVs driven by commuting office workers to fall into the same generous category that was intended for farm and construction vehicles. Americans remain unapologetic gas-guzzlers whose pain at the pumps is largely self-inflicted.

Gas prices in Palm Beach County averaged $1.74 for unleaded regular Monday, a nickel above the state average. Florida tourism takes a hit when families cancel road trips. Some stations in New York, New Jersey and California already have broken the $2 mark. Never at a shortage of explanations for higher prices, the industry appears to have a larger reserve than ever this year.