Drop in gas prices fuels suspicion of political gain

By Stephanie Griffith

Some Americans are suspicious that recent steep declines in gasoline prices might be the result of political manipulation, since the savings at the gas pump come just weeks before critical midterm US elections.

Earlier this year, news of record oil profits led many US consumers to believe that energy companies had deliberately kept prices artificially high to improve their bottom line.

Now gas prices have fallen for several consecutive weeks, and recent polls show that consumers have a new suspicion — that the price break is meant to give a boost to a US president and Republican Congress who had fallen out of favor with voters.

A Gallup poll last week found that two in five respondents believe administration has deliberately manipulated gas prices to coincide with the fall campaign season.

White House spokesman Tony Snow addressed — and summarily dismissed — the speculation at a press briefing earlier this week.

"I have been amused by … the attempt by some people to say that the president has been rigging gas prices, which would give him the kind of magisterial clout unknown to any other human being," he told reporters.

"It also raises the question, if we’re dropping gas prices now, why on earth did we raise them to 3.50 dollars before?" he said.

Manipulated or not, many observers agree that the falling prices at the gas pump have lifted Bush’s sagging poll numbers.

"It pumps up presidential popularity," said Larry Sabato, a political analyst at the University of Virginia.

And while many experts believe that the recent rebound enjoyed by Bush in the polls is a result of a new thrust on security, others say it is mostly about the newly discounted gas.

"I see a near-perfect correlation between Bush’s rise in the polls and the decline in gas prices," Sabato said.

"I think for most people it’s a lot more important than the global war on terror," he said. "People tank up twice a week. They feel it in their pocket book," he said.

It does seem clear US consumers are in a more upbeat mood as gas prices continue to decline. House Speaker Dennis Hastert crowed Tuesday after economic data showed consumer confidence rising.

"The economy continues to grow to record levels, and the American people are more convinced now as they feel relief at the pump and have more money in their pockets," he said.

And while the November 7 midterm elections portend a shakeup of the political establishment, American voters historically are less eager for political change if they can fill their cars’ gas tanks on the cheap.

Hastert said the improving economy gave voters reason to return Republican lawmakers to Congress, rather than defecting to opposition Democrats, whom many political observers believe are poised to take control of the House of Representatives.

"The American people can be assured that House Republicans will continue working to keep those prices low and American confidence high," Hastert said.

Pundits said that far from being the result of a Republican plot, the cheap gas can be explained by end of the summer driving season, a mild Atlantic hurricane season, healthy US energy stockpiles and lessening tensions over the Iranian nuclear crisis.

The average retail price of gasoline nationwide is now 2.38 dollars per gallon (3.8 liters), the lowest since March 2006. Oil prices, meanwhile, have fallen by more than 20 percent since July, when prices topped 78 dollars a barrel.

The Automobile Association of America (AAA), said a gallon of gas one year ago cost 2.80 dollars, while in early September 2005, average gas prices were 3.06 dollars per gallon.

US President George W. Bush seems to be a major beneficiary of the lighter public mood — whether or not cheaper gas is the cause.

In a Los Angeles Times poll last week, his approval rating rose from 41 percent in late June to 44 percent.

Conversely, some of Bush’s worst poll numbers came in May and June, hovering in the low 30s — at the very time when gas prices were peaking.

Analyst Tom Kloza of the Oil Price Information Service told the USA Today newspaper last week that gas prices will drop an additional 10 to 20 cents a gallon by Election Day — offering further cheer to Bush and fellow Republicans.


Copyright © 2006 Agence France Presse

15 Responses to "Drop in gas prices fuels suspicion of political gain"

  1. G.S.  September 27, 2006 at 9:22 pm

    There Is No Political Conspiracy

    Whether the terms “Hedge-Fund Speculation” or “Spot Price Contracts” are used to describe commodity investments is irrelevant. The point is that oil prices are control by market speculators, not by politicians. While most governments do ‘stock-pile’ a variety of commodities, including oil, they don’t have the power to use the commodity reserves to maintain or sustain a constant control on futures contracts. Woe on us all if they figure out how to completely control commodity trading.

    I laughingly read a blog that suggested that the ‘terrorist’ are the forces behind the rise and fall of oil futures in order to accomplish two goals. First, to cause sharp increases of comsumer fuels to enrage the American consumer. Secondly, to drive prices down just before elections to make the current administration and congressional majorities appear to have manipulated the price of oil for political gain at election time.

    Man, it would help so many to take Economics 101.

  2. Rice Farmer  September 28, 2006 at 1:25 am

    “TREASURY SECRETARY’S FIRM MAY HAVE PLAYED MAJOR ROLE IN GAS PRICE DROP”

    http://prorev.com/2006/09/treasury-secretarys-firm-may-have.htm

  3. LYNNE KRINGLER  September 28, 2006 at 6:45 am

    Perhaps GS should take poly sci classes, from rove and the bushcons.

    Or better yet, watch the senate hearings with the oil CEOs. Or maybe look up the #1 all time recipient of campaign oil money. bush and #2 tom delay. Or you could call Sen. Barbara Boxer of California and ask about refineries and Calif.

  4. Nostradamnthem  September 28, 2006 at 2:50 pm

    Our ‘pResident’ himself told us the recent high prices were because there was insufficient refinery capacity (of course he didn’t use a big word like insufficient, being challenged to pronounce ‘refinery’ correctly). So a price decrease of 70 cents a gallon (in my area at least) would represent a drop in price, and presumably a similar increase in production, of 22 percent. But I’ve not read of any new refinieries starting production. He wouldn’t have lied, would he?

  5. Phil  September 28, 2006 at 7:27 pm

    “The economy continues to grow to record levels”???!?!?!?!?! Anyone have any idea how much crack somebody has to smoke to say that with a straight face?

  6. Mr Fezziwig  October 6, 2006 at 4:36 pm

    Normally we forget about scandelous political actions months later but high gas prices hurt us where it hurts the most, in the wallet, we won’t forget this as quickly and this survey suggests we linked it to the republicans. Looks like they have a rocky road ahead if we blame them every time gas prices rise.

  7. Scr  September 27, 2006 at 3:43 pm

    “”It also raises the question, if we’re dropping gas prices now, why on earth did we raise them to 3.50 dollars before?” he said.”

    Perhaps so your oil buddies, cronies and lifelong patrons could make a bloody fortune?

    Because y’all had calculated that $3.50/gal. was just about the most you could charge people before they revolted?

    There’s no shortage of reasons why you would do that. And no shortage of reasons why they’ve realized that they’ve gotten all they can for now, lest they be taxed for windfalls or everyone buy a hybrid car.

    Notice a distinct falling-off on the debate over windfall taxes? Fascinating, ain’t it?

    Keep those SUVs, folks – Keep buying good old American ‘Light Trucks’. Ford and GM need you, and besides – Gas won’t be that expensive again ’til December!

    /rant off
    S.

  8. Grover Syck  September 27, 2006 at 3:47 pm

    I find it very suspect in that here in Cincinnati, the price of gas has dropped to $2.10 + or -. The price of diesel (last time I looked) was still in the $2.80 range.

    Personally, I expect gas to go up like the space shuttle, being back in the $2.80 to $3.00 range before christmas.

  9. Steve Horn  September 27, 2006 at 3:49 pm

    really – manipulation in anticipation of an election – do you think so??? Like Exxon and Shell MIGHT just remember who let ‘em get away with the finacial rape of the globe on their oil profits?
    If the American people are stupid enough to NOT see this as overt political manipulation and operation then, to be honest, we deserve whatever group of pet-rocks we place into our , that’s OUR government –

    Peace

    Steve

    http://www.deadwinorecords.com

  10. GasAddict  September 27, 2006 at 5:38 pm

    “I have been amused by … the attempt by some people to say that the president has been rigging gas prices, which would give him the kind of magisterial clout unknown to any other human being,” Tony Snow told reporters.

    Notice he doesn’t deny that prices ARE being manipulated, just doesn’t say by who.

  11. Ray  September 27, 2006 at 6:04 pm

    Of course the election dictates the agenda. The President will not meet with the CEO’s of the Detroit auto industry until after the election. Why? The news that the government will not help the industry might hurt the GOP in the industrial Mid-west. So delay the bad news and the public will be fooled.

  12. David Anthony  September 27, 2006 at 6:19 pm

    As usual, the mainstream media gets it wrong or purposely grays the questions.

    The republicans and bush are not manipulating the oil or gas markets, they are too stupid and inept. But the oil companies either employ or know a lot of bright people who know how to manipulate the market. The hedge-fund speculators have left the energy market and since hedge-funds operate in a murky unregulated environment, there is no way to find out who is directing the exodus, at least not immediately. The mainstream media will not investigate because of self-interest and the believe that the population will not care. And to a certain extent, they are right. The public, in general, is rather stupid, it was proven in 2004.

    The Democrats will not take back any branch of government in November. Bush and his murderous gang will go merrily along and some crisis will move the price of gas back to $3 a gallon in January.

    Then in 2008, after 8 years of preparing the Justice Dept, the FBI, the CIA, the Federal Judgeships, and the military. After 8 years of a compliant legislative branch and Supreme Court. There will be a massive domestic incident that will be tied to international terrorism. It will be announced that, because of the war on terrorism and the imperative to stay the course and protect the country, the presidential elections have been postponed until it is safe to resume the American tradition of elections and peaceful change of leadership. Bush will be designated a presidential caretaker of the American government until the war on terror is over. The funny part will be polls showing 35% of the population approves the plan.

    Can it happen? A lot of stars would have to align, but we have all witnessed a lot of gut wrenching and alarming events in the last six years. Never thought an election would be circumvented by a branch of the government. Never thought it was possible for four teams to arrange financing, be trained and then execute what happened on 9-11 without one of our agencies sniffing them out, all on American soil. Never thought we would, without cause, blatantly invade and occupy a sovereign nation. Never thought the public would be so completely duped into an invasion and occupation of another country, especially since the Bay of Tonkin happened a relatively short time ago. Never thought the government would be an advocate for kidnapping and torture. Never thought the mainstream media would become a non-factor in holding government and businesses accountable. Never thought the mainstream media would withhold a history-changing story like the NSA wiretapping until after the 2004 election, a move clearly benefiting the incumbent. So, on and on it goes, who knows what the next two years will bring.

    Truly disturbing times.

  13. Joe Lawrence  September 27, 2006 at 6:27 pm

    So, one Steve Horn joins the Rethuglican chorus claiming to hear opponents saying that, somehow, “the administration is rigging gasoline prices,” knowing full well that only the dense are even thinking along those lines.

    It is, of course, the oil execs who are desperate to have the Rethugs maintain power, and they need no meetings with the Rove/Cheney administration to know what steps to take prior to the election in order to goad that outcome.

    It might do the general public some good to see an illustration of the refining process, if only to see that the same process produces, whether one wants them or not, a variety of results. A refiner cannot make one product (gasoline, say) without making others (6-oil, say), and the cost of producing gasoline very closely parallels that of diesel. Thus, any significant difference in the pump price between gasoline and diesel fuel should set off the Barnyard Excrement detectors of the consumers….and the investigative media. Yeah, I’m waiting for that.

  14. mr.ed  September 27, 2006 at 7:15 pm

    Certainly not the first time that perception becomes reality. It doesn’t explain the disparity in local prices: Yesterday, rural NY $2.60. PA $2.30, OH $2.10. All in less than fifty miles, and not explainable by state tax differences. If you pay it, that’s the price. If you walk, or there’s more competition, it’ll drop.

  15. mr.ed  September 27, 2006 at 7:15 pm

    Certainly not the first time that perception becomes reality. It doesn’t explain the disparity in local prices: Yesterday, rural NY $2.60. PA $2.30, OH $2.10. All in less than fifty miles, and not explainable by state tax differences. If you pay it, that’s the price. If you walk, or there’s more competition, it’ll drop.

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