Schumer presses Bush to tap strategic oil reserve

www.dailyfreeman.com By Jonathan Ment, Freeman staff February 27, 2003

KINGSTON - Rising gasoline and oil prices, due to the threat of war with Iraq and problems in Venezuela, have prompted U.S. Sen. Charles Schumer to again call for a release of oil from the nation's emergency stockpiles.

Prices in Upstate New York are at an all-time high, Schumer said in a telephone news conference on Wednesday. He said the cost of a gallon of regular gas could approach $2 by spring.

Schumer, D-N.Y., has asked the Federal Trade Commission to investigate whether price gouging is taking place. Gouging itself is not a crime, though collusion between dealers to fix or inflate prices is.

"In a time of war, if someone is gouging, they're going to have to back off," the senator said.

The problem lies not with local service stations, who do better when prices are low and stable, but with big oil companies, Schumer said.

A year ago, a gallon of gas in the region cost $1.20, Schumer said. Today it's as much as $1.75, or 46 percent more.

Schumer's office estimates that if the price per gallon rises to $1.90, the higher prices will cost an estimated 411,200 motorists in Ulster, Dutchess, Columbia and Greene counties an average $596 more per year apiece. Wednesday's projections are in step with those Schumer made in October.

Main-Care Energy, which does business in 11 counties, said Wednesday that its price per gallon of regular gas was $1.746, plus local sales tax. Its price for heating oil was $1.799 per gallon.

Schumer's office placed the average price per gallon of heating oil at $1.86 in the Hudson Valley.

The state Energy Research and Development Authority estimates the average heating oil customer in New York will see an increase of $332, or 52 percent, in their heating expenditures this year.

"Even if you don't drive your car and even if you don't heat your home with oil, if you go to the supermarket, prices are higher because the market heats with the oil and the trucks that deliver the food have to use gas," Schumer said. "All we need from the (Strategic Petroleum Reserve) is to release 30 million barrels. We have 600 million barrels. The (Strategic Petroleum Reserve) is right by the refineries in Louisiana and Texas."

Those refineries typically refine Venezuelan oil, which they're not getting, Schumer said. He estimates oil from the Strategic Petroleum Reserve could be on the market in two to three weeks.

For comparison, Schumer offered the summer and fall of 2000, when former President Clinton released 30 million barrels from the reserve over 30 days. Prices subsequently dropped by more than 10 percent and helped stabilize gas prices for nearly a year, he said.

"In 2000, prices were almost this high. Using the (Strategic Petroleum Reserve) is essential, and I'm asking the president to do it before we go to war and prices go up any farther," Schumer said. "We've talked to people at the New York (Mercantile Exchange) and they think the prices will go up if we go to war, at least in the beginning.

"This is as bad as any tax and it affects the whole economy like any tax does," he added. "It's getting to a crisis point, and we should be doing something about it."