As the price of gasoline soars to $4 a gallon in some parts of the U.S. -- with a few experts predicting a $5-per-gallon price by summer -- an agreement by two government agencies to increase cooperation in their investigations of energy market manipulation may help ease consumer pain at the pump.
The Federal Trade Commission and the Commodity Futures Trading Commission announced an agreement Tuesday they say will help ensure the fairness and openness of the energy markets they oversee. The Memorandum of Understanding, signed by the FTC and the CFTC, will allow greater sharing of non-public information by the two agencies as they conduct investigations into the crude oil and gasoline markets.The agreement strengthens the FTC's ability to enforce its petroleum market manipulation rule, which forbids manipulation of U.S. petroleum markets, and augments the authority of the CFTC to pursue manipulation in the oil markets.
"With gasoline prices on the rise, we are committed to doing all we can to ensure that petroleum markets are competitive," FTC Chairman Jon Leibowitz said in a statement. "Competition works to keep prices lower, and this MOU improves the ability of the FTC and CFTC to take action if and when we find market manipulation."
The announcement could hardly be more timely as gasoline prices continue to climb, consumers scream bloody murder, and some politicians are calling for investigations. Five U.S. Senators -– Maria Cantwell (D-Wash.), Olympia Snowe (R-Maine), Jay Rockefeller (D-W.Va.), Mark Pryor (D-Ark.) and Ron Wyden (D-Ore.) -– recently called on the FTC to investigate possible manipulation of crude oil prices.
"We are writing to inquire whether the Federal Trade Commission (FTC) is fully utilizing the regulatory authority granted to it by Congress to ensure American consumers are paying a fair price for gasoline," said a letter sent to the FTC by the five lawmakers, according to The Hill. "We urge you to use this authority aggressively to ensure that recent crude oil market price spikes and volatility are not the result of manipulative practices or anticompetitive behavior."
Both the FTC and the CFTC have the authority to take legal action against fraudulent manipulation of petroleum markets, while the CFTC enjoys exclusive jurisdiction to regulate exchanges, clearing organizations and intermediaries in the futures industry. The MOU will enhance the flow of information between the FTC and the CFTC where their regulatory interest overlap, most importantly in the oil and gasoline markets.
"It is important for regulators to share information to be able to pursue market manipulation wherever it arises," CFTC Chairman Gary Gensler said in a statement, adding that he looks forward to working with the FTC to ensure "the integrity of the oil markets."
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