From the Los Angeles Times:
WASHINGTON — The prospect of sharply higher fuel prices, including $4-a-gallon gasoline, may not have made it into Oval Office briefing books, perhaps explaining why President Bush was surprised Thursday when a reporter mentioned what energy analysts are saying could happen soon in many parts of the country.
“Wait, what did you just say? You’re predicting $4-a-gallon gasoline?” Bush responded to a reporter who said some analysts expect prices to soon climb that high. “That’s interesting. I hadn’t heard that. . . . I know it’s high now.”
The price of oil set another record Thursday, jumping $2.95 to close at $102.59 a barrel in New York futures trading.
But even before the recent surge in oil prices, analysts were predicting that the average price of a gallon of gasoline could reach $3.75 nationwide in the near term and top $4 in states such as California and Hawaii.
At a Shell service station in the Bay Area city of San Mateo, the price of a gallon of regular had already reached $4.29, well above the state average of $3.42, as measured by the AAA auto club.
Not surprisingly in a presidential election year, Bush’s remark provoked comparisons to his father, George H. W. Bush, who took a serious political hit in 1992 after appearing to be out of touch with Americans’ everyday lives.
During a White House news conference, Bush tried to put the best spin on months of bleak economic news. “I don’t think we’re headed to a recession, but no question we’re in a slowdown,” Bush said.
[Federal Reserve Chairman Ben S.] Bernanke told the Senate Banking Committee that he didn’t see much danger of so-called stagflation, the combination of falling growth and rising prices that ravaged the economy three decades ago.
“I don’t think we’re anywhere near the situation that prevailed in the 1970s,” Bernanke said.
However, he acknowledged that higher food and fuel prices were creating “inflationary stress” that could make it tougher for the Federal Reserve to keep the economy out of recession by cutting interest rates.
Bush said he understood that uncertainty about the economy was hard on American consumers. But he said the answer was for Congress to make the tax cuts he pushed through in his first term permanent. Many lawmakers have balked, arguing that those reductions have led to a dangerously large federal budget deficit.
The average U.S. pump price was $3.16 a gallon Thursday, according to AAA, but higher in many regional markets.
Energy analysts have offered motorists little solace, saying that the rules of supply and demand for gasoline and other fuels are apparently being overridden, and commodity prices are continuing their run.
The Energy Department’s most recent weekly petroleum report said gasoline inventories were more than 8% above their five-year average. Gasoline demand is about 1% shy of its level of a year ago.
Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey, said the situation was likely to get worse. He expects retail gasoline prices to hit record highs between $3.50 and $3.75 a gallon nationally and that $4 gasoline in California won’t be considered a rogue price.
Chimpy in his own words (from Think Progress, where you can watch the video if your stomach can handle it):
QUESTION: What’s your advice to the average American who is hurting now — facing the prospect of $4 a gallon gasoline, a lot of people facing –
BUSH: Wait a minute. What did you just say? You’re predicting $4 a gallon gas?
QUESTION: A number of analysts are predicting $4 a gallon gasoline this spring when they reformulate.
BUSH: That’s interesting. I hadn’t heard that.
….but wait, jids….
Yet a few minutes later, Bush wouldn’t answer a question regarding donations for his presidential library because, he claimed, “I, frankly, have been focused elsewhere, like on gasoline prices.”