WASHINGTON -- President Clinton, confronting a political firestorm over soaring gasoline costs, said Thursday ''there is no economic explanation I can think of for the run-up in the prices.'' He promised the government would wage an aggressive inquiry.
Wholesale gasoline prices have dropped more than 25 cents a gallon over the past week in cities where prices at the pump are still over $2 and rising. The industry says retailers just haven't yet caught up to the decline.
High gasoline prices became an issue in the presidential race, with Vice President Al Gore blaming the oil companies while his Republican rival, George W. Bush, accused the Clinton administration of failing to persuade oil exporters to increase production.
Clinton expressed concern that higher gas prices would ''rifle throughout our economy,'' suggesting that oil prices ideally should be ''somewhere in the neighborhood of $20 to $25 a barrel.'' The main U.S. crude oil, West Texas Intermediate, rose 72 cents Wednesday on the New York Mercantile Exchange, where contracts for August delivery closed at $31.37 a barrel.
Clinton said Congress needs to help the administration combat higher prices by passing his proposals to encourage more stripper-well production, reauthorize the Strategic Petroleum Reserve, approve research funds for alternative energy programs and enact an electricity restructuring bill. The president spoke with reporters on the South Lawn before leaving on a trip to Arizona and California.
OPIS Energy Group, a private company that tracks national energy prices in detail, reported a dramatic decline in wholesale gasoline prices in the Chicago, Milwaukee and St. Louis areas over the past week. All three areas are among cities that have been required to sell only a new blend of cleaner gasoline because of severe summer pollution problems.
According to the figures, wholesale prices in Chicago peaked at $1.60 a gallon June 15 and dropped to $1.41 Tuesday, plummeting an additional 10 cents the next day to $1.31, a drop of 29 cents. Meanwhile, retail prices at the pump increased by two pennies to $2.13 during the same week.
Retail prices in Milwaukee also increased slightly during the week to $2.02 Wednesday, while wholesale prices fell from $1.58 June 15 to $1.33, a decline of 25 cents. St. Louis saw wholesale prices decline by 13 cents, while retail prices went up nearly 4 cents during the same period.
The average price of gasoline for the nation on Wednesday was $1.64 a gallon, according to AAA, the automobile association.
Carol Browner, head of the Environmental Protection Agency, said she was struck by the fact that the decline in wholesale prices coincided with demands for an investigation of Midwest gasoline prices by the Federal Trade Commission.
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