Bush calls for inquiry into possible gas price gouging

WASHINGTON -- President Bush, under pressure to address rising gasoline costs, called on regulators Tuesday to investigate possible price gouging, as Republicans and Democrats jockeyed to wring election-year advantage from the issue.

 But even Bush's economic advisers suggested there was no one quick fix to a problem the president acknowledges has left him with "no magic wand to wave." 



 At the Federal Trade Commission, Bush's call was the latest in a decades-long series of requests from elected officials, including the president, to be on the lookout for industry manipulation that might jack up prices at the pump. 



 For Americans paying more than $3 per gallon, however, there may be little relief. The agency's conclusion in the vast majority of cases has been that price increases have less to do with industry gouging or windfall profits than with supply and demand in the complex oil market. 



 Still, a stampede of politicians are calling for investigations of dealings by oil and gas companies, whose high profits and lavish retirement packages make them an appealing target for lawmakers casting about for someone to blame. 



 As prices rise, polls suggest the cost of a fill-up is lowering voters' opinions of their elected leaders. That has left politicians searching for ways to address the problem, or at least insulate themselves from blame. 



 Bush, laying out a four-point plan, said his administration won't "tolerate manipulation. ... We expect our consumers to be treated fairly." 



 He repeated his call for Congress to allow oil-drilling in the Arctic National Wildlife Refuge and asked his environmental chief to waive some clean-air rules that require the use of fuel blends in some places. Congress should also revoke an oil-industry tax break, expand incentives for purchasing fuel-efficient cars, and fund more research into developing fuel alternatives to oil, the president said. He also announced he would defer filling the nation's Strategic Petroleum Reserve until after summer. 



 None of the measures proposed by Bush or leaders in either party would do anything to lower the price of gas in coming months, experts say. But Congress is eager to act nonetheless, fearful that to do otherwise will give their constituents a reason to throw them out of office in this November's congressional elections. 



 That means adopting a get-tough posture on price gouging, which industry analysts say is designed to placate voters, not bring down gas prices. 



 "The sad truth is that every time prices jump up, there is typically a call for the FTC to investigate," said Vito A. Stagliano, an energy official under President George H. W. Bush. He said he could not recall "a single case" in which such a probe had uncovered wrongdoing. 



 The FTC will not say how many gas-price investigations it has undertaken, or what the results were, according to Mitch Katz, a spokesman. The FTC plans to report next month on the results of an investigation ordered by Congress last year on gas-price spikes in the aftermath of Hurricane Katrina. 



 Deborah Platt Majoras, the FTC chairman, told Congress last year that "the vast majority of the Commission's investigations and studies have revealed market factors as the primary drivers of both price increases and price spikes." 



 The real culprits in the recent increases, oil industry analysts said, are a combination of mounting global demand, refiners' seasonal transition from making home heating oil to producing gasoline and a transition from the use of the fuel additive MTBE to ethanol, which is pricier and more difficult to transport than gasoline. 



 "There are lots of reasons that gas prices are up," said David Howard Davis, a University of Toledo political scientist. But he added that "oil is a fairly competitive industry." 



 Democrats, looking for ways to reap electoral advantage, said Bush's plan was inadequate, and suggested his proposals to hold the oil industry accountable were signs of a president under strain. 



 "I guess when your poll numbers have hit rock bottom, and your congressional allies are avoiding you like the plague, there's no better time to see the light," said Sen. Robert E. Menendez, D-N.J., who proposed a 60-day holiday on the 18-cent-per-gallon federal gas tax. 



 Menendez said the $6 billion cost of the break would be defrayed by rolling back three tax breaks for the energy industry, and by eliminating the royalty relief for companies that was approved in last year's massive energy bill. 



 "The last thing the oil companies need is more handouts," he said. "The first thing the American people need is more help." 



 Republicans, dusting off proposals to expand oil and gas exploration and ease regulations on refiners, said Democrats' past opposition to initiatives such as opening ANWR to drilling were to blame for the gas price spikes. 



 "Democrats are happy to criticize Republican policies, but when the time comes for them to propose a solution, they are suddenly quiet," Rep. Deborah Pryce, R-Ohio, said in a statement. " `No' is not an energy policy."