Politicians work to decrease record-high oil prices in Illinois

By Jeremy Werner

Despite record-high gasoline prices, including an average of $3.85 in the Champaign area Thursday, AAA predicts 37.9 million citizens will travel more than 50 miles this Memorial Day weekend, a decrease of just 0.9 percent from last year,

To help alleviate the cost of travel, the federal government passed legislation to reduce gas prices. Yet, a bill suspending the Illinois state sales tax failed to pass the Illinois General Assembly on Tuesday.

The U.S. Congress passed the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act this week to halt shipments of oil to national reserves. The Strategic Petroleum Reserve can hold up to 727 million barrels of oil – it is currently 97 percent full – and provides the government an emergency oil supply.

President Bush did not veto the bill, freezing the 70,000 gallons of oil shipped to the reserve each day for the rest of the year. The bill is designed to lower the price of fuel by creating a larger supply of oil. Shipments could resume if the average oil price falls below $75 for 90 days, but that seems unlikely with oil trading at $135 a barrel Thursday.

“It’s hardly the silver bullet, but its going to make the difference of several cents at the pump, hopefully,” said Phil Bloomer, press secretary to U.S. Rep. Tim Johnson (R – 15th District). Johnson voted in favor of the bill.

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Illinois House Democrats blocked an attempt by Republicans to discharge a bill from the Rules Committee that would suspend the 19 cents per gallon sales tax on gasoline until mid-September.

When a similar bill was passed in 2000, AAA reported an eight to 10 cent drop in gas prices overnight. But Democrats say lifting the sales tax would cost the state and local governments millions of dollars and not help consumers in the end.

State Rep. Naomi Jakobsson (D – Urbana) opposed the bill, saying it would just be a “giveaway to big oil companies, distributors and gas stations.” She said prices may decrease slightly but would not drop as much as the total state gas tax, adding to fuel revenues.

“Any proposal that would show to actually reduce gas prices and make a significant difference for consumers would be good, but just reducing the gas tax is not going to do that,” Jakobsson said.

The suspension of shipments to national oil reserves is not expected to lower gas prices over the long haul either.

“It’s not meant to be a panacea in any way,” Bloomer said. “It’s not the answer.”

The Federal Trade Commission is launching an investigation into the record-high fuel prices at the urging of Illinois Sen. Dick Durbin.

As Americans are paying more at the pump, oil companies are seeing record profits.

“We must ensure that American consumers are not falling victim to price-gougers and profiteers,” Durbin said in a press release.

Johnson is also pushing for a suspension of the federal gas tax, along with Republican presidential nominee John McCain, but Bloomer said he acknowledges it would be a band-aid on consumers’ open wallets.

“The answer is more reliable renewable fuels, conservation, more efficient cars,” he said. “Those are all long-term responses, and a combination of those things over the long term are what this country needs.”

Illinois gas prices, taxes among highest in nation

Illinois is tied with California for the fourth highest gas prices in the United States at $4.005 per gallon, according to the AAA. Only Alaska ($4.113), New York ($4.019) and Connecticut ($4.083) are higher. On average, Illinois motorists pay 57.9 cents per gallon in taxes, according to chicagogasprices.com. California has the highest total of gas taxes at 63.9 cents per gallon, while Alaska has the lowest total at 26.4 cents per gallon.

Illinois also allows counties and municipality’s to apply local taxes. For instance, Cook County has a six percent tax to fuel purchases with Chicago adding a five percent tax. Regular gas averaged $4.21 a gallon Thursday. Regular gas prices have risen 32 cents in the past month in the state and are up 51 cents from a year ago.