Sen. Franken Presses for Crackdown on Oil Speculators Who Drive Up Gas Prices
Senator Introduces Legislation to Rein in Top Cause of Spike in Gas Prices
In response to recent reports that excessive oil speculation adds 56 cents per gallon to what consumers in Minnesota and across the country pay at the gas pump, U.S. Sen. Al Franken (D-Minn.) today introduced legislation to bring down gas prices by cracking down on oil speculators.
Sen. Franken said Minnesotans now pay an average of $3.68 a gallon for gasoline, up a full 10 cents more per gallon in two weeks. He pointed to a recent report in Forbes magazine that found that oil market speculators drive the market price of oil up and add 56 cents to a gallon of gas.
The legislation would direct Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler – whom Sen. Franken met with last Thursday to urge him to take immediate action – to utilize all his authority, including emergency powers, to eliminate excessive oil speculation. The emergency directive is identical to bi-partisan legislation that passed the House of Representatives by a vote of 402-19 during a similar crisis on June 26, 2008.
“Demand for oil is lower than it has been in five years, yet instead of a drop in gas prices, families in Minnesota are breaking the bank just to fill up their tanks,” said Sen. Franken. “Excessive oil speculation by Wall Street is adding about fifty-six cents to every gallon of gas and it needs to stop now. This bill directs the administration to put an immediate end to this practice.”
On March 5th, when Sen. Franken first wrote to Commissioner Gensler urging the CFTC to crack down on oil speculation, the average price of gas in Minnesota was $3.58. Today, just 14 days later, the average price of gas in the state has soared to $3.68 a gallon.
The legislation, introduced by Sen. Bernie Sanders (I-Vt.) and cosponsored by Sens. Franken, Richard Blumenthal (D-Conn.), Ben Cardin (D-Md.). and Amy Klobuchar (D-Minn.), would require the CFTC to invoke its emergency powers within 14 days to:
- Curb immediately the role of excessive speculation in any contract market within the jurisdiction and control of the Commodity Futures Trading Commission, on or through which energy futures or swaps are traded; and
- Eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.
In addition to the letter to CFTC in March, Sen. Franken also sent a letter to the Office of Management and Budget, which is available here. Sen. Franken first pressed CFTC Chairman Gary Gensler to regulate excessive oil speculation in March of 2011; you can read about that here. He also cosponsored the End Excessive Oil Speculation Now Act of 2011.