RENO, Nev. — President Barack Obama announced Thursday that the Justice Department is assembling a team to “root out any cases of fraud or manipulation” in oil markets that might be contributing to $4 a gallon-plus gasoline prices.
“We are going to make sure that no one is taking advantage of the American people for their own short-term gain,” Obama said at a town-hall style meeting at a renewable energy plant in Reno.
The national average price for a gallon of regular gasoline was $3.84 on Thursday, about 30 cents higher than a month ago and almost a dollar higher than a year ago.
Obama, decrying such levels as yet another hardship “at a time when things were already pretty tough,” said Attorney General Eric Holder was forming the Financial Fraud Enforcement Working Group.
It will focus some of its investigation on “the role of traders and speculators,” Obama said. The group will include several Cabinet department officials, federal regulators and the National Association of Attorneys General.
In a statement in Washington, Holder promised to “be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity. If illegal conduct is responsible for increasing gas prices, state and federal authorities should take swift action.”
However, in a Justice Department memo accompanying his statement, Holder suggested no evidence had turned up yet of unlawful price manipulation.
“Based upon our work and research to date, it is evident that there are regional differences in gasoline prices, as well as differences in the statutory and other legal tools at the government’s disposal. It is also clear that there are lawful reasons for increases in gas prices, given supply and demand,” the memo said.
“Nonetheless, where consumers are harmed by unlawful conduct that has the effect of increasing gas prices, state and federal authorities will take swift action,” Holder said.
There’s not much Obama can do to affect the price of gasoline in short term, something he acknowledged in his remarks. Gas prices have risen steadily as a result of tensions in the Middle East and northern Africa and rising demand from China and other emerging economies.
Given that no evidence has yet surfaced of actual fraud or price manipulation in oil markets, Obama’s remarks appeared, at least in part, as more of an attempt to assuage public anger over rising gas prices.
In an Associated Press-Gfk poll last month, 51 percent of adults said they thought recent increases in gas prices were due to “oil companies that want to boost profits” rather than changes in the global oil market. Nine percent said higher prices stemmed from a combination of both, 37 percent from changes in the market.
Obama renewed his proposal to end roughly $4 billion annually in various government subsidies to oil and gas companies “at a time when they’re making record profits and you’re paying near record prices at the pump. It has to stop.”
Obama’s West Coast visit — his most extensive travel since announcing his re-election bid — offered a glimpse of how he will seek to re-energize the independents and first-time voters who carried him to victory in 2008. Obama argues that more work must be done to make the vision of America he promised a reality, and that he is the only one who can see those hopes through.