Pumped Up: Background
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RAY SUAREZ: As American road trippers once again prepare for that time of year, they’re getting punished at the pump for the second straight summer.
CONSUMER: It’s terrible. More than $2.00 a gallon. It’s unbelievable.
CONSUMER: I used to be able to fill up my tank for under $20, maybe around $16, $17 and today it cost me $25.74.
RAY SUAREZ: Some of the highest prices in the country are in California, where the average price is $1.93 for regular unleaded, and in the Midwest, where drivers are paying $1.80. Nationally, the average price rose this past week to $1.71. In dollar terms, that’s the highest ever, but adjusting for inflation over the years, it’s still about a dollar cheaper per gallon than it was in March 1981, and U.S. fuel is still a fraction of what it costs in Europe. While some energy analysts are calling $3 a gallon gas a serious possibility, others say prices could come down a little by midsummer, when oil imports and refining capacity are expected to increase. Whatever happens, it’s already a political issue for the White House, which is getting criticism from members of both parties. Last Friday President Bush acknowledged the problem, and he stressed two of his administration’s central themes:
PRESIDENT GEORGE W. BUSH: What I say is I worry about the fact that hard working people are paying high prices at the pump; it concerns me a lot. And therefore the Congress needs to cut taxes as quickly as possible to give people money to be able deal with this situation. I also say we need to build more refining capacity. We need more supply.
RAY SUAREZ: Later this week, the President will announce his energy plan. He’s expected to call for more refineries and pipelines and to step up domestic oil exploration. But some Republicans say that’s not enough. They want to repeal the 18-cent-a-gallon federal gas tax immediately. Democrats, meanwhile, knocked the Bush plan for short-changing conservation and renewable energy ideas.
SPOKESMAN: The President has responded to the gathering crisis by throwing up his hands and saying, “there’s nothing we can do, there’s no way to give people immediate relief from blackouts and sky-high increases of the price of gasoline at the pumps.” The President’s do-nothing response begs the question: Is the Republican answer to our energy crisis letting the energy companies dictate our energy policy?
RAY SUAREZ: Meanwhile, economists are watching to see how motorists respond to higher prices as the peak travel season begins.