"Rapidly rising gas prices are a boon for big oil companies and hedge funds but [image-nocss] a bust for Ohio families, truckers, and small business owners. In the last three months, we've seen how excessive speculation has driven the price of oil contracts through the roof," Brown said. "This speculation has a dire effect on our economy--higher prices at the pump for commuters driving to work or parents taking their kids to school, and higher operating costs for truckers and small business owners trying to stay afloat."
He added, "So while multi-millionaire and billionaire investors placing on the price of oil might be turning a massive profit, regular Ohioans are struggling just to get by. That's why I've asked the Obama Administration to enforce new powers granted by the Wall Street reform bill and crack down on the irresponsible speculation driving oil prices up to record levels."
Jennifer Rhoads, president and CEO of the Ohio Petroleum Marketers & Convenience Store Association, said, "What we're seeing with gas prices goes beyond simple fluctuations in supply and demand. The vast majority of Ohio's petroleum retailers are small, family-owned businesses who play a key role as job providers in their very own communities. The impact of an unnecessary, artificial increase in gas prices goes beyond their bottom line--it hits their friends, family and neighbors, as well."
At the news conference, Brown released a letter that he sent to the Commodity Futures Trading Commission (CFTC). This letter urged the agency to use its full authority under the recently passed financial reform bill to protect consumers and small businesses from artificially inflated gasoline prices. The Senate Agriculture Subcommittee on Hunger, Nutrition & Family Farms--of which Brown served as chairman in the 111th Congress--has jurisdiction over the CFTC.
Oil speculation occurs when prices are driven by investor activity, rather than traditional market forces. Brown said that several indicators have shown that gasoline prices are rising in part due to excessive speculation by hedge funds and index funds in the financial markets, as has been the case in past spikes in gasoline prices, including in 2008. Rising gasoline prices harm consumers and small businesses and may hinder economic recovery, he said.
Click here to view the full text of Brown's letter to the CFTC.
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