Thomko Petro Chemical Blog

High gasoline prices are here to stay for at least the next couple of years and the government can do little in the short term to mitigate them, US Energy Secretary Samuel Bodman said at the weekend.

"Suppliers have lost control of the market," Bodman told NBC television, in explaining how gasoline (petrol) prices had risen as much as 60 cents a gallon, or at least 25%, in one month.

"We've got demand coming from China, from India, from the United States," reflecting strong economies, Bodman said.

He also noted that conflict in Iraq tightened crude supplies.

"Clearly we are going to have a number of years, two or three years, before suppliers are going to be in a position to meet the demands," Bodman said.

Bodman meanwhile rejected some lawmakers' allegations that consumers are being deliberately gouged by oil companies, and said popular calls to set a windfall profits tax on the companies would not work.

"You had 20 oil companies at one time; (now) you have five ... We need to inject some competition into the mix here," she said.

"What happens is, because this administration believes what's good for Exxon Mobil is good for America, they simply do what the oil companies want," Democratic Senator Charles Schumer said on ABC television.

Republican Senator Trent Lott told CNN that the price rises stem from unabated consumer demand and lack of long-term polices, but he assailed the oil business as well.

"I think there is manipulation. Perhaps it is the traders that are artificially driving up the prices out of anticipation of what might happen in Iran.

"But when you look at the profits of the gas companies, the oil companies ... it is hard to choke that down."