Obama aims to ‘root out’ cause of high gas prices

RENO, Nev. — President Obama said Thursday that the Justice Department will try to "root out" cases of fraud or manipulation in oil markets, even as Attorney General Eric Holder suggested a variety of legal reasons may be behind gasoline's surge to $4 a gallon.

"We are going to make sure that no one is taking advantage of the American people for their own short-term gain," Obama said at a town-hall style meeting at a renewable energy plant in Reno.

The national average price for a gallon of regular gasoline was $3.84 on Thursday, about 30 cents higher than a month ago and almost a dollar higher than a year ago.

Obama, decrying such levels as yet another hardship "at a time when things were already pretty tough," said Holder was forming the Financial Fraud Enforcement Working Group. The task force will focus some of its investigation on "the role of traders and speculators" in the oil-price surge, Obama said. The group will include several Cabinet department officials, federal regulators and the National Association of Attorneys General.

In Washington, Holder said he would press ahead with the investigation, even though he did not cite any current evidence of intentional manipulation of oil and gas prices or fraud.

"Based upon our work and research to date, it is evident that there are regional differences in gasoline prices, as well as differences in the statutory and other legal tools at the government's disposal," Holder said in a memo accompanying a statement announcing the task force. "It is also clear that there are lawful reasons for increases in gas prices, given supply and demand."

"Nonetheless, where consumers are harmed by unlawful conduct that has the effect of increasing gas prices, state and federal authorities will take swift action," Holder said.

He promised to "be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity."

There's not much Obama can do to affect the price of gasoline in short term, which he acknowledged in his remarks. Gas prices have risen steadily as a result of tensions in the Middle East and northern Africa and rising demand from China and other emerging economies.

Given that no evidence has yet surfaced of actual fraud or price manipulation in oil markets, Obama's remarks appeared, at least in part, as more of an attempt to assuage public anger over rising gas prices.

Other presidents also launched similar inquiries at times of rising oil prices and widespread public suspicions of market manipulation by the oil industry or by speculators. AP