New York's Senator
CHARLES E. SCHUMER


FOR IMMEDIATE RELEASE March 16, 2000

Kingston Gas Prices Soar to $1.59 Per Gallon, Could Hit $2.00 by Summer, New York State, U.S. Gas Prices at All-Time High

Schumer Renews Call for Release of Strategic Petroleum Reserve

Kingston gas prices have soared to $1.59 per gallon and are likely to increase and remain high well into the summer, US Senator Charles E. Schumer announced today. At this time last year, gas prices in New York State cost an average of $1.01 and Schumer predicted that without a significant increase in oil supplies, Kingston gas prices could reach $2.00 per gallon by summertime.

"Gas prices this high not only put a strain on family budgets but could have a severe detrimental effect on Ulster County's economy," said Schumer whose office surveyed area gas prices. "If prices remain on their current track, a typical family in which the parents commute to work will be forced to pay nearly $1,000 more for gasoline this year."

Since September, Schumer has warned that supply cuts by the Organization of Petroleum Exporting Countries (OPEC) would lead to acute oil shortages in the United States and has called on the Clinton Administration to use the nation's 570 million barrel Strategic Petroleum Reserve to compel OPEC to increase production and stabilize oil prices.

"The Strategic Petroleum Reserve is the one bargaining chip we have to match OPEC's stranglehold on the US oil market. It is the ace in the hole that we never played, and that is part of the reason why OPEC is still reluctant to increase supply and make oil affordable," said Schumer. "As it stands now, even if OPEC increases production at their March meeting, consumers can expect to pay extremely high prices at the pump until the summer."

Schumer warned that because of OPEC cutbacks over the past year, the U.S. is vulnerable to drastic oil price fluctuations as domestic oil inventories have reached a 20-year low.

"We are extraordinarily vulnerable to the whims of OPEC. Just as a brief cold spell this winter sent home heating oil prices soaring, if OPEC simply tightens supplies further by even a small amount we will pay dearly at the pump," said Schumer. "Since last March, when OPEC initially constricted supply, the price of crude oil has soared to over $30 per barrel - where prices have stayed for a month - and the climb shows no signs of letting up. Oil could very well be selling for $40 per barrel by Memorial Day."

Schumer warned last September that supply cutbacks by the Organization of Petroleum Exporting Countries (OPEC) would lead to severe shortages and steep price hikes in the winter months. He called on the President on September 21^st to prepare to release oil from the federal government's Strategic Petroleum Reserve in order to stabilize prices and weaken OPEC's resolve, and in November introduced legislation with Senator Susan Collins (R-ME) to give the Administration greater authority to release the reserves. Schumer has also met numerous times with Energy Secretary Bill Richardson to lobby him to release the reserves. And last week, Schumer and Senator Susan Collins offered a resolution on the Senate floor to urge the Clinton Administration to use the Strategic Petroleum Reserve more aggressively in the future to combat OPEC's supply cutbacks.

"Gas prices this high are the equivalent of a $1,000 additional tax on Kingston area families and businesses. It is a gas tax that area businesses and families shouldn't have to pay," said Schumer.

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