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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

Shirley October 08, 2012 at 05:16 AM
Sorry Debbie, this is only mouth music by a politican. What have they ever done when gas prices rise? Nothing but a few comments that are supposed to make us think they care.
Rick Schwartz October 08, 2012 at 05:55 AM
When they start a congressional investigation and invite the oil company CEOs to explain how nothing really changed except skyrocketing prices, then is when I will believe that our senator is doing more than just posturing.
Jean Singer October 08, 2012 at 11:58 AM
Whenever the prices start to rise because of a 'short supply,' why are the oil tankers anchored outside Long Beach harbor, conveniently waiting (two or three days) for prices to go way up before coming in the harbor to offload?
Rob October 08, 2012 at 02:48 PM
A refinery fire and broken pipeline are the cause of this surge in prices. On top of that you can add the lack of exploration allowed by the White House and regs and taxes in California led by LIBERALS. This boobgie man idea of big oil controlling markets is funny, but ignorant. The issues we have are in DC and Sac-Town and their names all have "D" after them.
BTB October 08, 2012 at 03:31 PM
Maybe we should ask Obama these questions. What did he say.."You (they) didn't built that".
Piet Westerbeek lll October 08, 2012 at 04:48 PM
Feinstein (incumbent)out. Did not accept challenger's debate request. What a whimp! Getting too old for the job.
John Webb October 08, 2012 at 05:43 PM
Di-Fi has spent her entire career blaming business for problems caused by politicians. She needs to be replaced by someone who can take a different approach to government. Its not that she cannot learn what really is happening with gas prices, it just that she refuses to believe it is anything not listed in her playbook of attacking businesses.
keyplayer October 08, 2012 at 06:05 PM
What is a "boobgie" man? Rob, I see that your grasp of complex issues can be reduced to one silly assumption: "It's all the dad-gum liberals' fault!".
Robert Bruce October 09, 2012 at 03:44 PM
It was "business" that took over the Pacific Electric company and destroyed the only public transportation system that we had in Los Angeles. Now we are forced to drive on the freeway in cars that use gasoline the price of which the oil companies control at will. Please note that diesel also went up despite the fact that there is zero shortage. We should classify gasoline as a public utility and regulate it as such.
keyplayer October 09, 2012 at 08:29 PM
Businesses deserve to be chastised when they contribute to this "race to the bottom" that we are now experiencing: a willingness to diminish hard-fought gains in the health and safety of workers, an acceptance of continuing degradation of the environment, and an increasing willingness to dodge their responsibility to "give back" to society.
John Webb October 09, 2012 at 08:42 PM
Great idea Bruce. Lets take a quick look at what public utilities have done for us lately. There is a meter on your electric inlet so the utility can shut down your airconditioning when it gets hot. Water rationing is suggested everytime the water companies fail to supply enough water to meet our needs. All this despite sitting next to one of the largest bodies of water in the world. Bruce, the only thing that regulations does is turn excess into scarcity.
MFriedrich October 09, 2012 at 09:07 PM
Oh come on, stop with the liberal vs. conservative drivel, please. This is so old. As if one side is just perfect little angels, while the other the devil incarnate. Listening to these comments, jesus, it's no wonder so many people are voting Libertarian. I'm considering doing so out of spite for all of these devout Romney and Obama backers. Yes, the FTC will do it's job with or without Feinstein's geriatric blathering and political grandstanding. Now just stop pretending like international oil companies are like any other business out there with this "aw shucks, they're just trying to make a profit". No. They are not like other businesses. At all. They have tremendous financial resources and political influence. They have their meathooks in everything, including government political campaigns, legislation drafting, and industry standard setting, and will do everything they can do extinguish the wealth and liberty of hard-working, taxpaying Americans and rape the environment in order to maximize profits. Stop watching the Chevron commercials and snap out of it.
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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