Gas prices soar, feds could tap oil reserves

March 6, 2011 (WASHINGTON)

The average price of regular gasoline in the United States has jumped 33 cents per gallon in the last two weeks.

With the higher prices at the pump, there's talk of tapping the country's emergency supply of petroleum.

Analysts say the surge is gas prices are being driven largely by the situation in Libya, and it comes even before the usual early summer spike in gas prices.

The spike could potentially have a negative impact on economic recovery, which is one reason the White House is talking about the possibility of tapping the reserves.

Tim Shaw says it takes about $100 to fill the tank of his van that carries the Chicago Boyz Acrobatics Team to their performances. A few weeks ago it was more like $80.

"I've never seen gas this high ever, and it's definitely going to hurt us in the pocket," Shaw said.

The price at some pumps in Chicago for regular unleaded is inching very close to the $4 mark seemingly overnight, and some drivers are frustrated.

"It's ridiculous, I mean, thinking about back in the day when it was almost two bucks a gallon and now it's up to almost four, it's just ridiculous," said Akia Posley.

And it's gotten the attention of President Barack Obama and Chief of Staff William Daley, who says dipping into the country's strategic petroleum reserve is a possibility.

"We're looking at the options and the issue of the reserve is one we're considering. It is something that only has been done on very rare occasions. There's a bunch of factors that have to be looked at," Daley said.

The 727 million barrels of oil stored underground along the Gulf Coast is a U.S. insurance policy of sorts to protect against a sudden shortage of supply.

Analysts say there is no shortage right now, but with the economy starting to show signs of a recovery, there may be economic and political reasons to tap into it.

"It's a good idea to signal the readiness to use it but the conditions for using it are not there yet," said oil industry consultant Roger Diwan.

If, as expected, tapping into the reserve would bring the price back down, some drivers have a different opinion.

"If you have it and it's cheaper to do, then yeah," said Glenn Davis.

The last time the U.S. tapped into the reserves was in September of 2008 in response to Hurricanes Gustav and Ike, and before that in 2005 because of Hurricane Katrina.

Some analyst question whether tapping into the reserve supply in the past has actually led to lower prices at the pump.

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