Release the Reserves
Last week, I was joined by Consumer Affairs Commissioner Jane Hoffman at a Lower Manhattan Mobil station to announce the results of a monthly survey of gasoline prices around the city. It wasn't good news. The survey shows that regular and premium gasoline prices have jumped a whopping 44% since June of last year, and that self-service gasoline costs 11% more per gallon than it did in May.
I remember standing at that same location a few months ago saying that the price of gasoline was going to become a real problem in the summertime. But the federal government told the nation gas prices would come down in time for summer vacations.
Everything we predicted has turned out to be true. The price of gasoline is going through the roof, and Energy Secretary Bill Richardson -- who once admitted that the Clinton Administration was napping while gas prices soared - continues to nap, by not putting enough pressure on OPEC to reduce its stranglehold on gasoline.
In March 1999, OPEC decided to hold back about 10% of its production in order to artificially drive up its price. It worked, and now OPEC is making enormous profits off of us. One result was the heavy cost of heating oil, which cost New Yorkers $30 million last winter in excess energy costs.
And this is the primary reason why we're paying so much more at the pump. Following the March 27th OPEC meeting, Secretary Richardson said that gas prices would average about $1.46 a gallon in the summer. Well, summer is here and gas costs more than $2 a gallon - not $1.46.
Make no mistake about it, this is having an impact on our economy. People don't use automobiles just for pleasure, they need them to get to work, for example. People use vehicles for commerce, and this gets reflected in the cost of everything. New York City, for example, is much more dependent on trucking than any other city in the country, because we don't have a rail link that crosses the Hudson River.
These high oil prices are being reflected in the cost of our food, and in the cost of the items that we buy.
All last year, despite the urging of many members of Congress, including Senator Chuck Schumer, the President did nothing about it. The Clinton Administration doesn't have an energy policy of any kind. There's no policy to try to exploit alternative sources of energy and make us more independent of OPEC. There's no policy to deal with OPEC when, for over a year, they hold back production.
At the beginning of the summer, OPEC released a little more oil, about
2.5%, not nearly enough to have an impact, and unlikely to help with
the soaring price of heating oil for the fall and winter.
It's time to put the pressure on OPEC to release a lot more of their reserves, and it's time to make it clear to OPEC that we will release the oil reserves that we have in order to combat their market manipulation. The President must take decisive action now, before another cold, expensive winter.