Tap Reserves, Israel Says, as Gas Prices Climb

The day after a gas tax cap was supposed to be enacted, Suffolk County Legislature Presiding Officer William Lindsay said Wednesday that a “technical error” will delay implementation of the tax cap for at least another three months.
 
Lindsay, D-Holbrook, said the county law was never filed with New York State.

He added that a special meeting has already been called for Thursday, and Suffolk County Executive Steve Levy has been asked to file a certificate of necessity. The tax cap can be filed following another affirmative vote, and would begin three months after it is filed with the state.

U.S. Rep Steve Israel (D-Huntington) said Tuesday that he wants President Barack Obama to consider using the Strategic Petroleum Reserve to stabilize gas prices.

On Long Island, gas prices are up 15 cents in the last week. One website  said Long Island gas prices went on average from $3.36 on Jan. 28 to $3.59 on Feb. 28. This afternoon, that site was showing Huntington prices for regular gas ranging from $3.56 to $3.59.

Israel said, “For OPEC and speculators, oil price spikes mean profits. But for Long Island families, it means an unexpected economic burden. Instability in the Middle East means we’re paying at the pump here at home. Over the long term, we need the United States to transition off of foreign oil. And for the short term, we need to provide relief and prevent unmanageable gas prices that hurt families and slow economic growth. A small drawdown of the Strategic Petroleum Reserve can help us do that.”

Taking the edge off just a bit was a Suffolk County tax cap that took effect Tuesday on wholesale gas prices exceeding $3 a gallon.

Robert Lipp, deputy director of the Suffolk County Legislature Budget Review Office, said that the sales tax cap wouldn’t affect pump prices until it goes over $3.30 per gallon.

"The tax cap is on the wholesale price," Lipp said. "So the point to be made is that if consumers are seeing a price of $3.30 at the pump, that is the equivalent of a wholesale price of $3.00."

“The newly effective gas tax cap will provide relief for all county residents that are truly feeling the squeeze at the pump,” said Suffolk County Legislator Lou D’Amaro (D-Huntington Station), who provided the pivotal swing vote to approve the bill out of the Budget and Finance Committee of the Suffolk County Legislature and supported its final adoption. “This fiscally responsible law is projected to save consumers roughly $2.5 million over five years.  It strikes a good balance between assisting taxpayers and honest budgeting, while providing realistic ways to make up for lost revenues by cutting portions of the legislature’s own operating budget.  It is also an excellent way to wean ourselves off of a regressive tax, which disproportionately affects the middle class.”

Legislator Steve Stern (D-Huntington) said, “The volatility of energy prices strains family budgets and reduces consumer buying power at a time when our entire community is dealing with the challenges of the economic downturn,” Legislator Stern said. “This measure is a fiscally responsible way to give much needed relief to motorists struggling with the high cost of living in Suffolk County and to provide additional discretionary income to residents. I am proud to stand with my fellow taxpayers, not the oil companies, and join with my colleagues as we continue to hold the line on taxes in Suffolk County.  With continued unrest in the Middle East, it is important that we work hard to provide solutions for relief at the pump while also focusing on alternative energy sources locally.” 

The Strategic Petroleum Reserve holds 727-million-barrels of oil and is the largest stockpile of government-owned emergency crude oil in the world. Once oil is released from the SPR, it would take less than two weeks to enter the market, according to the Department of Energy.

The reserve has been used previously to help stabilize oil prices.  In 2000, after President Bill Clinton authorized a swap of 30 million barrels, oil prices dropped 20 percent in a week and 34 percent in a short amount of time. In 2005, President George W. Bush offered 30 million barrels from the SPR to reduce prices after Hurricane Katrina. Only 11 million barrels were released, which resulted in crude oil prices dropping by $5 a barrel.

Analysts are warning that increased crude oil prices could slow economic recovery and cause a sharp increase in the cost of U.S. oil imports.