- The Washington Times - Monday, April 24, 2006

From combined dispatches

The government should consider a tax on oil companies if they make excessive profits amid rising gasoline prices, a leading Republican senator said yesterday.

Sen. Arlen Specter of Pennsylvania, chairman of the Senate Judiciary Committee, said a windfall-profits tax, along with measures to stem concentration of market power among a few select oil companies, could offer eventual relief to consumers hurting at the gas pump.

“I believe that we have allowed too many companies to get together to reduce competition,” Mr. Specter said.

“They get together, reduce the supply of oil, and that drives up prices,” he said. “In the short run, it’s hard to deal with it for tomorrow. But I think windfall profits, eliminating the antitrust exemption, considering the excessive concentration of power are all items we ought to be addressing.”

Mr. Specter is backing legislation that would strengthen antitrust laws on oil company mergers after his committee held a hearing last month examining the growing consolidation of the oil industry. The nation’s largest oil companies, including Exxon Mobil Corp., have denied that their size has affected prices.

Retail gas prices across the country jumped an average of nearly a quarter per gallon in the past two weeks, according to a survey released yesterday.

Self-serve regular gasoline averaged $2.91 a gallon, up from $2.67 two weeks ago, said Trilby Lundberg, who publishes the nationwide Lundberg Survey of 7,000 gas stations. Washington-area prices have topped $3 a gallon at many stations.

As the price of crude oil hit a record $75.35 a barrel in New York last week, five of the world’s biggest oil companies — Exxon Mobil, BP, Royal Dutch Shell, Chevron and ConocoPhillips — reported combined profits of more than $111 billion.

Sen. Carl Levin, Michigan Democrat, said he thinks gas prices “would come down within a matter of days” if President Bush told oil companies that he was going to support a windfall-profits tax.

“But the president will not call the oil companies into his office because he’s been too closely allied with those oil companies; and if he does, it’s going to be a window-dressing conversation,” said Mr. Levin, who appeared with Mr. Specter on CNN’s “Late Edition.”

The 11-member Organization of the Petroleum Exporting Countries, which pumps 40 percent of the world’s oil, will address the oil-price issue at an informal meeting today in the Persian Gulf state of Qatar. Kuwait’s oil minister yesterday urged members to offer all their idle capacity to the market as soon as possible to try to lower prices.

“We must do what we can to help the market even if there will be no customers for the extra oil,” Sheik Ahmad Fahd al-Sabah told reporters at an energy forum in Qatar.

Current oil prices aren’t related to the fundamentals of supply and demand, he said. The standoff between Iran and Western nations over the Islamic Republic’s nuclear program had added $10 to the oil price, he said.

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