EAST PROVIDENCE — Consumers have to distinguish between “a red herring” and “fake” solutions for reducing oil and gasoline prices from those that will produce “real” and “tangible” results for struggling residents, U.S. Rep. Patrick Kennedy said yesterday.

Speaking in a cafeteria at East Providence’s Senior Center yesterday, he said Republicans believe drilling more in the United States will alleviate skyrocketing prices, but Kennedy said he thinks their proposals won’t do much.

He said they also fail to get to the core of the problem: Wall Street investment and financial firms are setting and driving the cost of oil up from what it actually costs, $75 per barrel, to today’s cost, $143 per barrel.

Kennedy said Congress hopes to ensure that only those in the oil business — such as producers and suppliers — have the “power to regulate trading.”

A bill to accomplish this shift has already passed in the House, Kennedy said. The Senate will discuss it after the holiday weekend.

“Don’t you think that makes sense?” Kennedy asked. “… Wall Street is pumping up the price as a means to make money on you, the consumers. These are people who have no business in the oil business.”

Kennedy said trading and prices should already be regulated by the government, but President Bush and Vice President Richard Cheney are “in bed with the oil companies.” He also said the oil industry has permission to drill on 86 million acres of land in the United States, but has failed to begin. Kennedy said that’s because the politicians’ plans are “all a red herring.”

He said Congress also wants to give additional support to the Commodity Futures Trading Commission, which is supposed to fight fraudulent trading. Kennedy said the commission could use at least 100 additional employees.

Meanwhile, the average price of gasoline fell 2 cents a gallon yesterday, only the second time that the price has fallen since February.

A survey of gas stations by the Rhode Island Office of Energy Resources the found an average price of $4.089 a gallon, down 2 cents from last week. Last week, the price had dropped by a cent from the previous week.

The average price is up 10 cents a gallon from a month ago, and $1.17 from a year ago.

Gasoline has jumped $1.09 a gallon, or 36 percent, over the past four months.

The price increases have been driven by the rising price of crude oil, from which gasoline is made. Crude oil for August delivery closed yesterday at $140 a barrel on the New York Mercantile Exchange, down 21 cents from Friday.

Crude is up about 46 percent so far this year.

In Rhode Island, the average price of heating oil jumped 8 cents a gallon to set a record high. The average price, according to the Office of Energy Resources’ survey, was $4.649 a gallon. That is 75 percent, or $2.01 cents per gallon higher than it was a year ago.

The average price of diesel fuel was $4.919 a gallon, down two cents from last week.

tbarmann@projo.com