White House seeks to deflect blame over rising gas prices

WASHINGTON Tue Feb 21, 2012 5:51pm EST

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WASHINGTON (Reuters) - Under fire from Republicans over rising gasoline prices, the White House on Tuesday highlighted factors beyond its control for gains in global oil markets, as it sought to deflect blame over a potentially damaging election-year issue.

Gas prices, which rose 7 cents a gallon last week, could unsettle economic confidence at a time when the U.S. recovery appears to be gathering pace, hurting President Barack Obama as voters review his track record ahead of the November 6 ballot.

Obama, a Democrat, acknowledged the risk posed by higher gas prices as he welcomed congressional approval of a payroll tax cut extension. The White House later argued that it was unfair to single out the administration over prices at the pump.

"There are no magic solutions to rising oil prices," said White House press secretary Jay Carney. "The rising gas prices clearly the effect of a variety of factors on the global price of oil," he told reporters, citing geopolitical unrest and rapid growth in India and China.

Oil prices touched a nine-month high on Tuesday, partly because Asian consumers moved to cut oil imports from Iran following Western sanctions, and this has already had an impact on forecasts across America.

Gasoline prices advanced last week to $3.59 a gallon from around $3.32 at the start of the year, a rise that helped push up U.S. consumer inflation in January, denting household spending power.

Republicans see gas prices as a way to attack Obama's energy policies as they campaign to deny him a second White House term.

They argue the president sees rising prices as a way to alter U.S. energy consumption, while taking aim at his decision last month to reject TranCanada Corp's proposed Keystone XL crude oil pipeline.

"The current unrest in the Middle East reminds us how dependent we are on resources from a volatile region - and how misguided the president's decision to block the Keystone pipeline from Canada really was," said Brendan Buck, spokesman for House of Representatives Speaker John Boehner, the top Republican in Congress.

Pushing back, the White House noted that U.S. domestic energy production was at an eight-year high and said the president's energy policies were helping to reduce the country's dependence on imported foreign oil.

But Obama himself drew attention to the gas price issue. Welcoming congressional approval of an extension of the payroll tax cut, he said earlier on Tuesday the $40 per paycheck that this break was worth would help offset "the rising cost of gas - which is on a lot of people's minds right now."

"The president is very aware of the impact that the global price of oil has on families," Carney told reporters. "The fact that this is happening only underscores the need ... to have a comprehensive energy policy," Carney said.

(Reporting By Laura Macinnis and Alister Bull; Editing by Sandra Maler and Eric Walsh)

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