The rising gas prices are hurting small businesses whose owners are having to take extra steps to curb costs.
"It's one of our number one costs behind salary," said John Liezert, who owns a business that delivers office supplies to customers across the Kansas City area.
Liezert is asking customers to place one large order per week rather than two small orders per week so that his drivers can save gas and money.
"Every one of our customers understands it because they see it every day when they fill up their own tanks," Liezert said Tuesday. "People know we are a small business."
Liezert made his comments the same day that President Barack Obama pushed Congress to give oil market regulators more muscle to deter price manipulation by speculators, the latest White House response to determined Republican attacks on administration energy policies amid high gas prices at the pump.
Obama wants Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions.
"We can't afford a situation where some speculators can reap millions while millions of American families get the short end of the stick," Obama said at the White House.
The plan is more likely to draw sharp election-year distinctions with Republicans than have an immediate effect on prices at the pump. The measures seek to boost spending for Wall Street enforcement at a time when congressional Republicans are seeking to limit the reach of federal financial regulations.
The president's $52 million proposal comes as Republicans have been hammering Obama on his energy policies, recognizing the political cost of high gas prices on the president. Obama's plan would turn the tables on Republicans by taking aim at Wall Street's role in the oil price chain.
Even before the White House announced Obama's plans, House Speaker John Boehner called it a political ploy and criticized the president for not using authority he already has to deal with such problems.
"The president has all the tools available to him if he believes that the oil market is being manipulated," Boehner told reporters Tuesday. "Where's his Federal Trade Commission? Where is the SEC? He's got agencies there. So instead of just another political gimmick, why doesn't he put his administration to work to get to the bottom of it?"
Senior administration officials who put together the proposal stopped short of blaming market manipulation for rising gas prices, but said they wanted to curtail the ability of speculators to take unlawful advantage of oil price volatility.
"The price is affected by a variety of factors," said Brian Deese, the director of the White House's National Economic Council. "Obviously, instability in the Middle East as well as growth projections across the globe are affecting global oil markets all the time."
Meanwhile, the average price of a gas at the pump has dropped slightly but is still higher than it was at this time last year.
"None of these steps by themselves will bring gas prices down overnight," Obama said. "But it will prevent market manipulation and make sure we're looking out for American consumers."
Rockhurst University professor Michael Tansey said Obama's proposal will likely have little impact on gas prices in the short term because of the time it will take for Congress to act, if at all. He said some of the requirements could defuse any potential speculative bubbles affecting prices.
Liezert says any reduction in gas prices will make a big difference in his bottom line.
"Even a little bit will make a huge impact," he said.
Part of the speculation issue is the increasing role of investment in oil futures contracts by pension funds, mutual funds, hedge funds, exchange traded funds and other investors. Much of that money is betting that oil prices will rise. Analysts say it is possible that such speculation has somewhat inflated the price of oil.
At the same time, investors can also bet that prices will go down - indeed, speculators have been credited for low natural gas prices. Studies of the effects of speculation on oil markets indicate that it probably increases volatility, but doesn't have a major effect on average prices.
Citing such evidence, Charles T. Drevna, president of the American Fuel and Petrochemical Manufacturers, said refiners count on the financial markets to hedge against higher crude oil costs. He urged Obama to instead focus on transporting oil from Canada through the Keystone XL pipeline that Obama has blocked.
Obama's plan this time calls on Congress to:
- Increase six-fold the surveillance and enforcement staff of the Commodity Futures Trading Commission to better deter oil market manipulation.
- Increase spending on technology to provide better oversight and surveillance of energy markets.
- Increase civil and criminal penalties against firms that engage in market manipulation from $1 million to $10 million.
- Give the Commodity Futures Trading Commission authority to increase the amount of money that a trader must put up to back a trading position. The administration officials said such authority could help limit disruptions in energy markets.
The White House effort comes as Republicans have talked of limiting the reach of a financial regulation overhaul that Congress passed in 2010 over their objections. Though the House Republican budget, which calls for sharp reductions in government programs, does not specify reduction in spending by the trading commission, the administration officials said that if the cuts were applied, the commission would lose more than five times what it spends on regulating energy markets.
The debate will pit Republicans who blame high gasoline prices on Obama who, in turn, blames Republicans for coddling Wall Street.
Copyright 2012 KCTV (Meredith Corp.) and Associated Press. All rights reserved.
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