Gas prices expected to fall soon

U.S. officials credit OPEC plan to pump more oil

$1.46 per gallon by summer

Senate votes, 66-43, against suspending federal gasoline tax

Energy

April 07, 2000|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON -- Gasoline prices should begin dropping this month, to a national average of $1.46 a gallon by summer, thanks to last week's decision by the world's oil-producing nations to boost output, federal energy officials estimated yesterday.

Revised estimates suggest that the Clinton administration's appeals to the Organization of the Petroleum Exporting Countries nations succeeded in reversing a price spike that some feared might reach an average of $2 a gallon for regular grade gasoline. Instead, average prices are expected to peak this month, at $1.52 a gallon, before consumers begin to enjoy the results of cheaper oil.

Energy Secretary Bill Richardson, whose lobbying efforts with OPEC had been demeaned by Republican leaders as "tin-cup diplomacy," said yesterday that the revised fuel price estimates were "proof that the Clinton administration's quiet diplomacy worked."

But even with an expected further drop in price, to about $1.39 a gallon by Labor Day, American motorists will be paying about 25 percent more for gasoline this summer than they did last summer, according to the estimates by the government's Energy Information Administration.

This means a family that traveled 12,000 miles from April through September would likely pay $170 more for fuel this year than it did last vacation season.

Families will apparently get no help from Congress in the form of relief from the federal gasoline tax, as some lawmakers had proposed.

In a test of sentiment on the issue, the Senate voted by a 2-1 margin yesterday not to suspend or repeal the federal gasoline tax as a response to soaring prices at the pump.

The 66-43 vote, which came as the Senate was shaping policy for the fiscal 2001 budget, has no binding effect. But it sent a strong message to Senate Majority Leader Trent Lott, the leading advocate in Congress of gas-tax relief, that most of his colleagues are unwilling to siphon money out of the fund that pays for federal highway projects.

Responding to pleas for help from truckers and other motorists, Lott has proposed a temporary repeal of the 4.3-cents-a-gallon gasoline tax increase approved by President Clinton and the Democratic-led Congress in 1993. His proposal also calls for suspending the entire 18.4-cents-a-gallon federal gasoline tax if the retail price rose above a national average of $2 a gallon.

Reduction too small?

Opponents in both parties complained that such a reduction would be too small to help motorists and might be pocketed by fuel distributors.

Also, critics warned, the reduction would create havoc in the federal fund that is supported by the gasoline tax and that pays for transportation projects.

"Do we want to stop the modernization of our nation's transportation system to give the gas middleman a few more pennies in his pocket?" Sen. John W. Warner, a Virginia Republican, asked his colleagues in urging them to vote against any rollback of the gasoline tax.

Lott has said he planned to bring his proposal to the Senate floor for a formal binding vote next week.

But the Democratic leader in the Senate, Tom Daschle of South Dakota, who opposes the proposal, said he doubted that the outcome would be much different.

"This is an indication that there is much stronger opposition to a repeal of the gasoline tax than many of us thought," Daschle said.

Misgivings signaled

House Republican leaders have signaled misgivings about a reduction of the gasoline tax because of its impact on the highway projects that lawmakers love to bring home to their districts.

Instead, Republican leaders have chosen to take advantage of the soaring gasoline prices to attack Clinton for reducing oil exploration in the United States in the name of environmental protection and thus increasing U.S. dependence on foreign oil.

Alaska's two senators also raised that argument in urging their colleagues to support a budget provision that would permit oil drilling in the Arctic National Wildlife Refuge, which has been off limits as a potential fuel source for two decades.

"It is time to turn around the direction in this country, reduce our dependence on imported oil, move into the areas where we have potential oil and gas discoveries in the Rocky Mountains, and my state of Alaska," argued Republican Sen. Frank H. Murkowski.

The Senate voted 51-49 to defeat an attempt by Sen. William V. Roth Jr., a Delaware Republican, to remove the oil-drilling provision from the budget blueprint. Roth argued that the refuge was a national treasure set aside for protection by President Dwight D. Eisenhower that should be left in a pristine state for future generations to enjoy.

Environmentalists hopeful

Though Roth lost, environmentalists were encouraged by the vote, because it was closer than in previous years and it fell far short of the two-thirds that would be required to override a presidential veto.

Clinton vetoed a 1995 proposal to open the Arctic National Wildlife Refuge to oil companies and has promised to do so again.

The Associated Press contributed to this article.

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