House and Senate Democrats are blaming Wall Street for spiraling gas prices, saying futures speculators are exerting too much influence over energy futures.
In a letter to the Commodity Futures Trading Commission (CFTC) on Monday 23 senators and 45 House members called on the panel to enforce provisions of last year’s Wall Street reform legislation ostensibly aimed at curbing such speculation in energy markets.
“It is one of your primary duties — indeed, perhaps your most important — to ensure that the prices Americans pay for gasoline and heating oil are fair, and that the markets in which prices are discovered operate free from fraud, abuse and manipulation,” the letter said.
In rules finalized last October in the Frank-Dodd reform bill, the CFTC is responsible for overseeing “position limits” on the amount of futures and swaps contracts for oil and other commodities that traders may hold, The Hill newspaper reported.
“As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent or diminish excessive oil speculation as required by the Dodd-Frank Act,” the letter says.
Republicans on the panel warned last year when the rules were implemented that the panel would unlikely have much influence on energy futures.
“I do not believe position limits will control prices or market volatility, and I fear that this Commission will be blamed when this final rule does not lower food and energy costs,” said Republican commission member Jill Sommers.
Republicans also say the best way to ease prices at the pump is to increase domestic supply. They have called on the administration to approve more oil drilling in the Gulf of Mexico, parts of Alaska’s ANWR region, and construction of the Keystone XL Pipeline that would stretch from Canada to Texas.
Sen. Bernie Sanders, I-Vt., a liberal who normally caucuses with Democrats, said last year that the rules imposed by the CFTC didn’t go far enough.
“Under this rule, a single Wall Street speculator will still be allowed to hold positions equal to 25 percent of the physically deliverable supply of crude oil, gasoline, and heating oil. That’s not enough,” he said.
The average price per gallon for gasoline has risen dramatically in recent weeks, and has become a major campaign issue. The current average price for regular gas is hovering around $3.77 a gallon, up from $3.48 a month ago.
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