The nation’s energy secretary yesterday said he does not expect U.S. gasoline prices to dip much below current levels for the next two to three years.
Citing demand from such emerging economies as China and India, Energy Secretary Samuel W. Bodman said “suppliers have lost control of the market, and, therefore, demand exceeds supply.”
“Clearly, we’re going to have a number of years, two or three years, before suppliers are going to be in a position to meet the demands of those who are consuming this product,” Mr. Bodman said on NBC’s “Meet the Press.”
Similar remarks came from other administration officials, including new White House Chief of Staff Joshua B. Bolten, who said high prices at the pumps are “not going to be solved in the short run by some silver bullet.”
“This is a very large problem,” Mr. Bolten said on “Fox News Sunday” in his first television interview since becoming the president’stop aide two weeks ago. “It’s built up over many years — decades, in fact.”
President Bush announced a series of immediate steps for attacking high energy prices last week, such as examining environmental rules limiting gasoline supplies and suspending the filling of U.S. emergency crude-oil stockpiles.
Mr. Bodman, meanwhile, said the administration has seen “no evidence” that oil companies are exploiting consumers by profiting from escalating prices, but also said, “This is one of those situations, I guess, where I would call it ‘trust but verify,’ ” citing a phrase that President Reagan used to refer to arms-control deals with the Soviet Union.
Senators from both sides of the aisle have raised concerns about the role of oil companies in the rising prices, with Democrats and some Republicans calling for a possible special tax on companies reaping record profits.
Exxon Mobil Corp., which in January reported a record one-year profit of $36 billion, last week announced an $8.4 billion profit for the first three months of this year — the company’s biggest ever for a first quarter.
When asked on CNN’s “Late Edition” whether such a windfall-profits tax should be exacted on major oil companies, Sen. Trent Lott, Mississippi Republican, said: “This may come as a shock to you, but I’m going to keep my options open.”
“If the oil companies don’t stop escalating the gasoline prices, it is going to force the people to demand that the Congress do something more and the Congress is going to have to do more,” Mr. Lott said.
Mr. Bodman, however, said taxing the companies may prompt them to pump less in a scheme to avoid having to pay, citing what happened when the government implemented such a tax in the 1970s.
“It did not work,” Mr. Bodman said. “That proposal does not hold water.”
Sen. Barbara Boxer, who also appeared on CNN, said oil companies are “manipulating supply” dishonestly to affect gas prices.
“I could tell you a story in my home state where Shell Oil tried to shut down a refinery that was their refinery. They said there were no buyers,” the California Democrat said. “We said, ‘Well, it sounds to me like you’re trying to manipulate the supply,’ and they said, ‘Oh no.’ ”