With American motorists facing high gas prices, U.S. President Barack Obama is calling for a government “crackdown” on manipulation of oil markets.
Mr. Obama asked Congress Tuesday to approve a $52-million plan to expand the government's regulation of oil trading and stiffen penalties against market manipulation.
“We can't afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher, only to flip the oil for a quick profit. We can't afford the situation where some speculators can reap millions (of dollars in profits), while millions of American families get the short end of the stick. That's not the way the market should work.”
In a nation with motorists long wedded to their cars, many drivers are complaining about the high price of gas, which now averages more than more than $1 a liter . That is lower than in many other countries, but high by U.S. standards, and a political problem for Mr. Obama as he seeks re-election to another four-year term.
In the United States, the price of crude oil on world markets accounts for about three-fourths of the cost of gasoline that consumers pay. Oil has risen 5 percent this year, hovering above $104 a barrel in Tuesday trading on the New York market.
Numerous factors affect the price of oil, including tensions over the West's demand that oil-producing Iran curb its nuclear weapons development program, an effort Tehran says is only for civilian purposes.
The president acknowledged that even with more regulation of oil markets, gas prices would not fall immediately.
“Let me close by saying none of these steps by themselves will bring gas prices down overnight. But it will prevent market manipulation to make sure we're looking out for American consumers. And in the meantime, we're going to keep pursuing an all-of-the-above strategy for American energy to break the cycle of price hikes year after year. We are going to keep producing more biofuels, we're going to keep producing more fuel-efficient cars, we are going to keep tapping into every source of American-made energy.”
Whether Congress will approve more regulation of oil trading is questionable. Mr. Obama, a Democrat, has been unsuccessful in convincing opposition Republicans to end government subsidies to highly profitable oil companies. Republican lawmakers have called for less government regulation of corporate interests and called on Mr. Obama to concentrate on boosting U.S. oil and natural gas production.
Senate Republican Leader Mitch McConnell said the president's proposal to investigate oil trading may be politically popular, but would do nothing to help lower the price of gas.
“If I were to guess, I'd say today's proposal by the president probably polls pretty well. But I guarantee you it will not do a thing to lower the price of gas at the pump. The president's goal here is not to do something about the problem, it is to make people think he is doing something about the problem — until the next crisis comes along.”