One of California’s senators has demanded an investigation into pump prices soaring above $5 a gallon in the Golden State.
Sen. Dianne Feinstein (D-Calif.) wrote Federal Trade Commission Chairman Jon Leibowitz yesterday about her “deep concern that the Federal Trade Commission (FTC) is failing to take action to protect California consumers from malicious trading schemes in the California gasoline market.”
“In order to uphold the FTC’s consumer protection mandate, I ask the Commission to open an immediate investigation into price spikes in California, to begin collecting relevant data on California’s gasoline markets, and to establish a permanent market monitoring team,” she said.
Feinstein said it’s incumbent upon the FTC to take action under the 2007 mandate by Congress under which the FTC can “investigate and prevent any manipulative or deceptive device or contrivance that could be resulting in unjustifiably high gasoline prices.”
The senator asked specifically that the commission investigate whether the Southern California price spike is the result of an “illegal short squeeze,” to implement data-sharing agreements, and to “establish a permanent gasoline and oil market oversight unit modeled on the Federal Energy Regulatory Commission’s (FERC) Division of Energy Market Analytics and Surveillance.”
“California’s 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,” Feinstein wrote. “In order to prevent such abuse from occurring again, Congress has spent more than ten years building up the market oversight authorities of the CFTC, the FTC and the FERC. However, our efforts depend on aggressive and serious enforcement within the Commissions.”