Even the big oil states of Louisiana and Texas, both rich in refineries, hit new price records today, said Judy Dugan, research director of the nonprofit, nonpartisan Consumer Watchdog and its OilWatchdog.org project. Oil companies that have made record profits on oil at over $100 a barrel are now cutting gasoline output at the refinery level to push up their profits on the making of gasoline.

The new round of record prices comes as gasoline consumption is declining nationally from last year, according to federal energy data, and is expected to fall further. California, where gasoline consumption has been down for the last seven quarters according to the state tax board, was particularly hard-hit at $3.638 per gallon for regular. Nationally, pump prices are 61.4 cents above last year, when price records were not reached until May.

In a competitive market, declining consumption would push prices down, but the oil industry operates by its own rules, kept in place by a powerful Washington lobby, said Dugan. Instead, the economy is locked in a struggle between energy-caused inflation and recession, while oil companies are expected to announce another round of record or near-record profits in a few weeks.

Congress has the opportunity to start bringing prices under control, but bills that would be helpful in cutting both oil and gasoline prices are stuck in a political mire, said Consumer Watchdog. The House Select Committee on Energy Independence and Global Warming, chaired by Rep. Edward Markey of Massachusetts, is set to question oil company executives about their prices and profits in a hearing Tuesday.

Consumer Watchdog has called for:

- Swift action to close the Enron Loophole in commodity trading regulation. A regulatory measure in the federal farm bill (S.2058 by Sens. Dianne Feinstein and Carl Levin) would help stop speculative oil pricing. This measure is stuck in a fight over other subsidies in the House-Senate conference committee.

- Senate approval of an alternative fuels bill funded by withdrawing $1.8 billion a year in unjustified taxpayer subsidies to oil companies. This measure, passed by the House, has not been taken up in the Senate, where opponents are using a filibuster tactic to require 60 votes for passage. A similar House measure was removed from the federal energy bill by the Senate last year under pressure from the oil lobby.

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