Don't Be Deceived About the Recent Drop in Gas Prices

Creating a New Oil Profits Tax Would Ensure Prices Stay Lower

By Teamsters President Jim Hoffa


After suffering through countless months of outrageous gasoline prices, motorists are relieved to finally be getting a break at the pump. But many Americans are wondering why this happened and, perhaps more important, how long it will last. With two oilmen in the White House, there shouldn't be any question.

After hitting a high in August, suddenly—almost magically—gas prices started falling, even after analysts had been cautioning Americans to get used to $3 per gallon. Despite those warnings and the BP pipeline crisis in Alaska, the price of gas has fallen 75 cents in two months on the eve of Election 2006.

Election Implications

How long will it take President George Bush to give his oil baron buddies the green light to continue price gouging once ballots are cast? The Organization of Petroleum Exporting Countries has announced production cuts, which translates into higher gas prices and is an important indication of things to come -- after Nov. 7, of course.

Saudi Arabia, the cartel's largest member, has thoughtfully decided to maintain current production through November.

A recent Gallup poll suggests that almost half of Americans are suspicious of the role the Bush administration played in the sudden and timely decline in gas prices, and think the drop likely has more to do with trying to secure a win for the Republican Party in the upcoming November elections than it does with supply and demand.

And there is plenty of evidence to support their beliefs.

It is no secret that the Bush family has had a long-standing relationship with the government in Saudi Arabia. Washington Post Managing Editor Bob Woodward wrote in his 2004 book, "Plan of Attack," that Prince Bandar bin Sultan, then-Saudi ambassador to the United States, also known as "Bandar Bush," promised he would keep oil production high enough to average out gas prices and bolster America's economy during the presidential election year.

Price Drop Not a Coincidence

The Saudi government is again trying to rescue Bush, in danger of losing his grip on Congress.

While Americans were suffering at the pump, Exxon posted a record $36 billion in profits last year—the most for any company ever. Exxon also gave retiring Chief Executive Lee Raymond one of the most generous retirement packages in history—nearly $400 million, including pension, stock options and other perks such as home security, personal security and use of a corporate jet.

Americans were fed up with price gouging at the pump, and polls showed they were going to make their anger known at the ballot box. Then gas prices started falling.

What a coincidence!

Our hands are not tied, though. We can cast our votes for candidates who will work to keep fuel costs down.

Democrats in both the House and Senate have called for a windfall-profit tax on oil companies that avoids taxing exploration and development of new production. Sen. Robert Menendez, D-N.J., proposed suspending federal taxes on gas and diesel fuel for 60 days, reducing the cost of gas by 18 cents per gallon for regular gas and 24 cents per gallon for diesel. Taxing the surging oil profits would easily make up the lost revenue.

Don't let Bush's magic gas wand sway your vote—it loses its power after Election Day.