WASHINGTON (AFP) — With anger rising among US consumers over skyrocketing fuel prices, the US administration is telling them relief will be long in coming, and only a global production increase will resolve the problem.
Even though the price of gasoline is a major issue in the US presidential campaign, the White House is saying it expects little price relief out of a meeting of oil exporters and consumers Sunday in Jeddah, Saudi Arabia.
Instead, the administration of President George W. Bush is pressing to increase exploration and production of oil, both internationally and inside the United States.
"There won't be any immediate impact on prices. There are no short-term magic wand solutions, you've heard us say, on prices," White House spokesman Tony Fratto said Wednesday.
"We do want to take a look at how the markets are performing, help people to understand supply and demand," he said.
Underscoring that official view of expectations, Bush decided not to attend the Jeddah meeting, sending his energy secretary, Samuel Bodman, instead.
The US emphasis is raising production over the long term.
Bush urged Congress on Wednesday to lift a decades-old ban on offshore oil drilling, put in place to protect coastal environments. Bush labelled the ban "outdated and counterproductive."
Fratto said that was the theme of the US message in Jeddah.
"Secretary Bodman and his two colleagues will be able to demonstrate that this president is doing what he can in the US to increase the supply of oil, and will encourage other producing nations to do the same."
Bodman will urge producer countries to encourage more investment in oil exploration with "meaningful" steps such as improving transparency in investment climates and regulatory regimes, Fratto said.
Bush travelled to Saudi Arabia twice this year to press for an increase in OPEC's output. Both times he came home empty-handed, though on Sunday the Saudis said they had raised their own production by 300,000 barrels a day in June, and would increase a further 200,000 barrels in July.
Nevertheless, the Bush administration has tried not to raise US consumers' hopes that fuel pump prices can be pared back significantly.
Average prices have topped four dollars a gallon (3.8 liters), up 36 percent from a year ago. Some analysts believe the price will keep climbing to seven dollars a gallon.
The impact goes far beyond consumers: it is hurting businesses in the US as the economy crawls along at near-recessionary pace.
And the cost of oil imports in April gave the country its biggest monthly trade deficit in 13 months.
The price of oil has fed into the intense battle to succeed Bush in the White House between Democrat Barack Obama and Republican John McCain.
The two have pitched rival solutions to voters.
McCain has proposed cutting the federal tax on gasoline for the summer holidays, and reversed a former stance to endorse new offshore drilling.
Obama has opposed the gas tax reduction but has pushed more conservation and alternative fuel measures, as well as a windfall profits tax on oil companies.
Bush raised the stakes as well by demanding that an Arctic natural wildlife reserve in Alaska be opened to exploration, and calling for support for the construction of more refineries and coal and nuclear power plants.
Frank Verrastro, an energy expert at the Center for Strategic and International Studies, said the world needs "a concerted effort on the part of producers and consumers to try to address the problem through increased production."
He said that kind of shift could include "getting rid of obstacles like refining capacity problems, increasing efficiency, sharing technology, getting rid of subsidies."
With no immediate relief in sight, consumers in the United States are seeking ways to get away from oil.
Car-buyers are eschewing gas-guzzlers for hybrids, and automakers like General Motors are responding by slashing production of pickup trucks and SUVs.
For Jeffrey Rubin at CIBC World Markets "the problem is, no one is turning off the tap, the tap is fully open."
"The only fix is to consume less oil," Rubin said.
But no one is urging US consumers to embrace conservation "because that's not a message that American motorists want to hear and in a presidential election year you'll probably tell people what they do want to hear."
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