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Feinstein Blames Gas Prices on 'Illegal Collusion' by Oil Companies

Sen. Dianne Feinstein accuses oil companies of engineering the current spike in gas prices. She calls on the Federal Trade Commission to take action.

California's senior senator today charged that California's record gasoline prices may be the ``results of an illegal short squeeze'' engineered by the handful of companies that refine gas here.

In a letter to the Federal Trade Commission, Sen. Dianne Feinstein, cited news reports that said Tesoro Corporation -- whose refinery in the South Bay went down for maintenance -- was taken advantage of by other gas suppliers ``either through collusion or the use of market power.''

``Publicly-available data appears to confirm that market fundamnetals are not to blame for rising gas prices in California,'' the California democrat wrote in a letter to FTC chairman Jon Leibowitz.

Feinstein also called on the FTC to monitor energy price and production data gathered by other government agencies, to watch for ``fraud, manipulation or other malicious trading practices.''

She also urged the FTC to establish a permanent gas and oil oversight market committee, similar to the Federal Energy Regulatory Commission's oversight of the natural gas and electricity markets.

Feinstein said ``California consumers are all-too-familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity.

She reminded the FTC of past frauds, like the 2000-2001 electrical crisis, which turned out to have been caused by market manipulation by Enronand other traders. That fraud cost the state an estimated $40 billion, caused rolling blackouts, and is cited by some historians as having cost Gov. Gray Davis his political career.

TELL US WHAT YOU THINK IN THE COMMENTS

Does the spike in gas prices seem like part of the normal market fluctuation, or do you think California consumers are being fleeced?

- City News Service

Amy October 09, 2012 at 09:25 PM
A (non-ironic) round of applause for mfriedrich!
Mercury October 09, 2012 at 09:25 PM
Aw shucks, if only Ronald Regan was still alive, he would make gas prices go down to $0.99 a gallon again, AMIRITE? I mean, there's no way it could be businessmen whose sole motivation in life is to make more money and increase profit margins! They are the ones looking out for us, the common folk!!!!
keyplayer October 09, 2012 at 09:32 PM
John, have you already forgotten about the Enron scandal? I'm amazed that you can be so gullible about the true nature of capitalism as it has evolved in the 21st century. By the way, check your grammar in your statement about "regulations": "does" should be used after a singular noun, "do" after a plural noun.
Harry Schmidt October 11, 2012 at 03:52 PM
Dianne doesn't know anything about oil prices. This is the umpteenth comission on oil so far no one has found any wrong doing except not letting the companies drill and build refineries. It is the green group that keep putting regulations on oil that have caused the problem. Also want to cut the price check out how much TAX is on every gallon. The government makes more money on gasoline than do the oil companies or gas stations. Where does that money go to green projects that fail???
steve November 29, 2012 at 02:30 AM
wow -----SO true. SO unfortunately true.

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