March 06, 2012

Manchin, Rockefeller, Rahall Work to Reduce Cost of Gas for Struggling Families

Call on CFTC to Prevent a Few Wall Street Insiders from Raising Price of Gas

WASHINGTON, D.C. — Senators Jay Rockefeller and Joe Manchin, as well as Congressman Nick Rahall, today urged a federal watchdog to do more to make sure that a few Wall Street insiders are not impacting the price of gas for struggling families.  

Rockefeller, Manchin, and Rahall sent a letter to the U.S. Commodity Futures Trading Commission (CFTC) urging the agency to implement new policies to better regulate oil speculation as required by the Wall Street reform law passed in 2010.

“It’s unacceptable that a few people on Wall Street trying to make an easy profit can mean higher gas prices for West Virginians,” said Senator Rockefeller.  “The CFTC needs to do its job better so that struggling families trying to make ends meet aren’t paying more because Wall Street insiders are betting against them.  Last spring I called on the CFTC to better control these activities and it’s extremely frustrating that they have yet to take any action.  We need a comprehensive strategy to bring gas prices down in the short and long-term, and CFTC action would be another important step.  We also need to crack down on the larger windfall profits that the oil companies get as gas prices go up.  We should all be able to rally around making gas prices more affordable.”

“The only thing that will ultimately end our dependence on foreign oil is having a national energy plan that uses all our domestic resources.  I have been pushing for that plan since my first day in the Senate,” Senator Manchin said.  “But until we have a plan in place, we need to do everything in our power to crack down on these out-of-control price hikes.  By some accounts, speculators have increased the price of a barrel of oil by as much as 25 percent, so I’m urging the Commodities Futures Trading Commission to step in and put a stop to these abuses so that West Virginia families don’t have to pay the price.” 

“Family budgets are suffering at the hands of market speculating that continues to drive our domestic gas prices ridiculously higher,” said Rep. Rahall. “The CFTC can apply a quick and meaningful brake by fulfilling an important duty to ensure prices hardworking Americans pay for gas and heating oil are free from fraud, abuse and manipulation.  I have long advocated a sustainable, long-term energy policy to reduce our dependence, especially on foreign oil, and continue to support investing in energy research and technologies to take advantage of our nation’s domestic energy sources, like coal.”

Oil speculators look to profit by betting where oil prices will be at a set time in the future.  They drive up the price of oil today, and hurt consumers and businesses across the country.  Many experts agree that this irresponsible betting must end and that these few investors are controlling too much of the market.  Even Commissioner Bart Chilton, one of the five members of the CFTC recently said that oil speculation could add $7-14 to every tank of gas that is purchased.  Oil speculation was also considered one of the root causes for why gas prices rose so much, so quickly in the summer of 2008. 

Click here to view the letter to the CFTC from March 5.