Release the Reserves
by Mayor Rudolph W. Giuliani
New Yorkers are continuing to feel serious pain from sky-high oil prices. They're reeling, and it's time for the Clinton Administration to take decisive action.
At the start of the year, the retail price of home heating oil in New York averaged 72 cents per gallon. It has since topped $2.50 per gallon in many parts of the state-more than triple what it was in January. This dramatic price leap means that New Yorkers using home heating oil can expect to pay at least another $350 this winter to heat their homes, and in certain areas upstate, that figure could be as high as $500.
The good news is that there's a remedy that's almost literally right under our noses. The United States maintains 570 million barrels of oil in underground tanks called the Strategic Petroleum Reserve. The reserve exists to protect Americans from the kind of artificial shortages that OPEC is now creating.
But last week, Energy Secretary Bill Richardson admitted that the Clinton Administration was napping as OPEC conspired to artificially inflate the price of oil. Yet the administration still refused to release any oil, announcing instead that the government would make available federal funds to help low-income people buy oil. To qualify for that aid, however, a family of four would have to earn less than $25,050-which means that President Clinton's help leaves out many of the poor, and leaves out the entire middle class.
Moreover, simply throwing money at the problem only makes it worse by playing directly into OPEC's hands. President Clinton's action is only serving to prop up the artificially high prices, and it subsidizes OPEC with taxpayer dollars.
New Yorkers and others throughout the region need real, decisive action without delay. The situation is critical-especially for poor people, for whom the extra costs imposed by OPEC's market manipulation are an onerous burden. Many of the most vulnerable New Yorkers-including seniors living on fixed incomes-have been forced to go without heat on some of the coldest days of the year.
Homeowners aren't the only ones suffering. In rental buildings, when landlords see their costs triple in the space of six weeks, they pass those cost increases on to tenants. And taxpayer dollars are also at stake. The crisis is expected to cost New York City taxpayers more than $27 million in excess energy costs. And already we're beginning to see a big increase in the price of gasoline.
We're not asking for much-simply for the release of a very small portion of the reserve. Leaders in both political parties estimate that releasing just 2 percent would alleviate the shortage, break OPEC's stranglehold, and-what's more important-drive down prices.
The President should quit wavering and act. With a lot of cold weather still to come, there's time for him to do the right. This is Rudy Giuliani.
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