President Obama ordered the attorney general to hunt down gas price gouging, as his most visible action against soaring fuel costs. But he's still sitting on the weapon that has always worked before - tapping the Strategic Petroleum Reserve.
So, if you're one of those who think an SPR tap is a bad idea, here's a question for you. Feeling gouged yet?
If not, you might be in the ivory tower world, or have a thing for high oil prices and a stake in motor fuels that derive from oil. You've gotta be either sheltered from this storm through your personal finances, or in some industry where higher pump prices actually help you against the competition.
By The Numbers:
U.S. Diesel Prices
On his road trip the past week, the president mentioned fuel prices at every public event. But he's stuck on the idea that there's plenty of oil out there, so the price surge is a speculation thing, and the best we can do is retarget policy to burn less oil-based fuels.
All well and good. Accurate, as far as it goes. But applying that kind of logic to the oil price spike is little better than his critics saying the soaring fuel cost means we have to drill for more. Both solutions are many years away. Neither does any good right now.
And right now is when we pay more at the pump. Right now is when truckers, airlines, barge towboats and ocean ships pay higher fuel costs and may not get enough rate bump from their customers to make it up. Right now is when consumers put off other spending decisions, on goods purchases that can give the economy a much-needed spur, because relentless fuel price hikes shrink their wallets. The Fed's extra money push will soon end, removing some monetary punch even as fuel prices sap the recovery's momentum.
SPR oil cost us about $30 a barrel, and the reserve is a huge unused federal asset. We could sell millions of barrels, well below today's prices of $110 or so, and net tens of millions in profit while still keeping an enormous stockpile. Allies have huge reserves, too, so how about some multilateralism on fuel costs?
Every time the government has said it will go after fuel price cheats, the effort has found few cheaters and had little impact on prices. It's slow as well. SPR taps always bring pump prices down, quickly and at least for a few months, to prick the speculative bubble and help the market find a more normal supply-demand equilibrium.
It's easy to say that gas prices reflect market fears, and then do nothing serious about it. That leaves us manipulated on price, and gouged by government inaction.