Washington: Americans have to pay higher gas prices because of global trends, be it an increase in demand of petrol and its products in India and China or instability in the Middle East, US President Barack Obama said Tuesday.
As such the US President in his remarks at the White House attributed the recent spike in gasoline prices in the country to the global trends and argued that the United States need to come out with innovative solutions to address this challenge.
"The problem is we use more than 20 percent of the world's oil and we only have two percent of the world's proven oil reserves. Even if we drilled every square inch of this country right now, we'd still have to rely disproportionately on other countries for their oil," Obama said.
Obama pointed out that as a result of this imbalance, Americans have to pay more at the pump every time there's instability in the Middle East or growing demand in countries like China and India.
"Now, that's what's happening right now. It's those global trends that are affecting gas prices. So even as we're tackling issues of supply and demand, even as we're looking at the long term in terms of how we can structurally make ourselves less reliant on foreign oil, we still need to work extra hard to protect consumers from factors that should not affect the price of a barrel of oil," Obama said.
He said that this includes doing everything US can to ensure that an irresponsible few aren't able to hurt consumers by illegally manipulating or rigging the energy markets for their own gain.
The United States, he argued, can't afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher, only to flip the oil for a quick profit.
"We can't afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick," he argued.
Obama said his administration has already taken several actions to step up oversight of oil markets and close dangerous loopholes that were allowing some traders to operate in the shadows.
"We closed the so-called Enron loophole that let traders evade oversight by using electronic or overseas trading platforms," he said.
"In the Wall Street reform law, we said for the first time that federal regulators will make sure no single trader can buy such a large position in oil that they could easily manipulate the market on their own. So I'd point out that anybody who's pledging to roll back Wall Street reform, Dodd-Frank, would also roll back this vital consumer protection along with it," Obama said.
"I've asked Attorney General Holder to work with Chairman Leibowitz of the Federal Trade Commission, Chairman Gensler of the Commodity Futures Trading Commission, and other enforcement agencies to make sure that acts of manipulation, fraud or other illegal activity are not behind increases in the price that consumers pay at the pump," he added.
Announcing new steps to strengthen oversight of energy markets, Obama called on the Congress to pass a package of measures to crack down on illegal activity and hold accountable those who manipulate the market for private gain at the expense of millions of working families.
"Congress should provide immediately funding to put more cops on the beat to monitor activity in energy markets. This funding would also upgrade technology so that our surveillance and enforcement officers aren't hamstrung by older and less sophisticated tools than the ones that traders are using," he said.
Congress, he said, should increase the civil and criminal penalties for illegal energy market manipulation and other illegal activities.
"Congress should give the agency responsible for overseeing oil markets new authority to protect volatility and excess speculation by making sure that traders can post appropriate margins, which simply means that they actually have the money to make good on their trades," he said.