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NEW HAVEN, Conn. -- U.S. Sen. Richard Blumenthal (D-Conn.) wants the Commodity Futures Trading Commission (CFTC) and Attorney General Eric Holder to work to halt improper speculation and manipulation of gasoline prices, according to New Haven Register report. On Tuesday, Blumenthal announced he has sent letters to the CFTC and Holder urging them to take action. He reportedly believes that speculative bets made by investors on future prices of gasoline have significantly affected the increasing cost of fuel.
"I am writing to urge immediate and strong enforcement of the newly adopted position limit rule to help stop increasingly rampant speculative trading reportedly driving recent rapid price increases in gasoline," Blumenthal wrote in his letter to the CFTC. "The Commission has done the necessary work to clearly establish legal authority to enforce position limits; it should use this authority now." The position limit rule restricts the size of speculative bets that can be placed on future prices of gasoline.
In his letter to the Attorney General, Blumenthal asked Holder to use both new and existing legal tools to halt speculative abuses.
"More than a year ago, the (Justice) Department established the Oil and Gas Price Fraud Working Group to combine and coordinate resources of several agencies against wrongful manipulation of energy markets," Blumenthal wrote. "I encourage you to use this tool as aggressively and effectively as possible. Speculators who make profits by artificially inflating the cost of a basic commodity should be identified and shut down." Blumenthall has criticized the Oil and Gas Price Fraud Working Group, created by Holder in spring 2011, to focus specifically on fraud in the energy sector by monitoring oil and gas markets for potential violations of criminal or civil laws, for allegedly being slow to release information about its investigations and their conclusions.
Independent Connecticut Petroleum Association President Gene Guilford stated he is "mystified" at the Justice Department's lack of action, according to the report.
"It's shocking that the Justice Department, with its broad powers, isn't doing anything, because this amounts to a heavy burden on the American consumer," Guilford said. "Since the end of June, the price of gas on the commodities market has gone from $2.20 a gallon to $3 a gallon, which amounts to an increase of between $8 billion and $9 billion in what the consumer is paying." Guilford stated that the "full weight of the government" should be brought to bear on the issue.
"The idea that we should be paying this amount of money for gas is ridiculous because the fundamentals don't support it," he said. "Our demand for gasoline has actually declined over the past few years. We are a net exporter of petroleum products for the first time since Harry Truman was president."