It was just two short years ago that oil had climbed to $145 per barrel and Connecticut’s Congressional delegation was calling on Wall Street to end excessive price speculation, which it partially blamed for the spike in gas prices at the pump.
With the Shell gas station on Capitol Avenue as his backdrop, U.S. Sen. Richard Blumenthal, the newest member of the delegation, was again calling attention to the situation Monday.
“To stop rising gas prices we should take strong steps against speculators, market manipulators and foreign cartels,” said Blumenthal. “These speculators and hedge funds are high-risk gamblers who drive up energy prices to line their own pockets at the expense of others.“
“To successfully crack down on these bad actors, we must provide federal agencies ample authority and resources,” Blumenthal said.
Most of those resources Blumenthal said should be given to the Commodity Futures Trading Commission.
Blumenthal, Gene Guilford of the Independent Connecticut Petroleum Association, and Michael Fox of the Gasoline and Automotive Service Dealers Association of America said the Commodity Futures Trading Commission has an opportunity to adopt regulations that put an end to some of the market speculation which leads to higher gas prices.
Guilford said these speculators pour literally hundreds of millions of dollars into the energy market, which artificially inflates prices at the pump.
Republicans in Congress want to cut the CFTC’s budget by 30 percent, which would limit its ability to regulate this type of speculation.
Fox said about $50 per barrel or $1.70 per gallon of gas can be attributed to the speculation.
He said people ask how is that possible since in 2008 it wasn’t able to get it done. He said the Dodd-Frank financial reform package provided a mechanism by which the CFTC could adopt stricter regulations for speculators.
“Now there’s a mechanism to do it,” Fox said. In an effort to help consumers join the discussion Fox said they created a link on their home page to the CFTC comment section. He said in 2008 when they pushed the effort more than 8,000 people made their voices heard.
The closing date for comments is Monday, March 28.
Blumenthal also advocated for President Barack Obama to tap into the Strategic Petroleum Reserve in order to give drivers relief.
And he’s signed onto U.S. Sen. Herb Kohl’s legislation which cracks down on the Organization of Petroleum Exporting Countries.
The legislation would permit the Department of Justice to bring actions against foreign states – such as members of OPEC – for collusive practices in setting the price or limiting the production of oil. The bill passed the Senate four years ago with 70 votes.