As prices at the pump skyrocket, John McCain and Hillary Clinton have offered a quick fix—but it is likely to disappear just as quickly.

The Democratic presidential nomination process has taken a bumpy detour through the oil patch since Hillary Clinton seized on John McCain’s idea to provide voters with a summer holiday from the 18.4 cents per gallon federal gasoline tax. Barack Obama derided the idea as political gimmickry.
However, with OPEC’s president talking about oil going to $200 per barrel and gasoline prices already hitting $4 per gallon in parts of the country, it’s likely that oil will produce a lot more political noise in the coming months.
Consumers reflect upon the rising gas prices and the effect it’s having on their lifestyles in our video.It may seem like ancient history, but a barrel of oil sold for $50 and a gallon of gasoline for $2.19 as recently as the start of last year. Since then, the combination of rising demand in China and India, supply problems in the North Sea and Nigeria, political instability in the Middle East, the weak dollar and speculation have driven prices to historic highs.
What has gone up may go up higher: “we are in uncharted territory…in a new phase where we are determining what the true value of oil is,” said to John van Schaik of Petroleum Intelligence Weekly.
Ed Morse, a Lehman Brothers oil expert, worries that the table is set for a price spike this summer if the hurricane season in the Gulf of Mexico is particularly intense or if there are new disruptions in the Middle East. “We could see another 60 cents per gallon or more” at the pumps, Morse forecasts.
Watch our video interview with Ed Morse, a Lehman Brothers oil expert, as he discusses price manipulation and the proposed gas tax holiday.With the nationwide average for regular gasoline already above $3.60, the result would be $4.25 per gallon in the peak summer driving season—and over $4.50 in states with higher taxes.
That price jump would be raw meat for politicians looking for votes. It also means that the tax holiday—even if Congress somehow passed it in the few weeks before summer—would be drowned out by much larger price hikes.
What about the voters? Skyrocketing prices are taking an increasing chunk out of consumers’ wallets, but many are saying that quick fixes make little sense. The issue did not help Clinton in the North Carolina or Indiana primaries. And, in the most recent CBS News poll, more people said the federal tax holiday was a bad idea than thought it made sense.
The result is that the tax holiday is effectively dead on arrival, even though local politicians in Florida, Missouri, Texas and elsewhere are still talking about it.
But popular opinion might be on to something else: in another recent survey, 83 percent said that oil company profits are too high.
Candidate Clinton is already there. She has charged that speculation by energy traders and market manipulation by oil companies accounts for “at least $20” of the price rise, and has demanded an investigation by the Federal Trade Commission. While experts admit that unprecedented amounts of speculative money has recently poured into commodity markets, market observers like van Schaik insist that it is impossible to determine how much of the price rise has been caused by speculation.
Nevertheless, attacking oil companies who are making extraordinary profits is the next stop for politicians. Sen. Charles Schumer (D-N.Y.) was among the first to take a shot. In a recent statement, he said, “oil companies are racking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices. It’s high time for Big Oil to pay its fair share.”
Catching the wave, both Clinton and Obama have proposed an extra tax on oil company profits, while McCain has been silent on the topic.
With Big Oil sure to fight back, the campaigns are likely to stay stuck in oil for months to come.