The group Consumer Watchdog is calling for the U.S. government to regulate U.S. gasoline supplies and refinery operations, arguing that refiners are keeping gasoline supplies tight in order to maximize profits.
"Historically, gasoline refiners and marketers held about a 30-day national supply of gasoline, but in recent years the supply has averaged 22 days, making prices more vulnerable to any shift in refinery output, either deliberate or accidental," Consumer Watchdog said.
The group further recommended regulation aimed at making refinery costs and profit reporting transparent.
It is also asking for Congress to close the "Enron loophole," by regulating the oil trading markets and thereby reducing the prospects for speculative trading. The group suggests increasing the "amount of margin funds that traders must put up in energy markets to help suppress speculation."
Lastly, Consumer Watchdog is asking for sales of oil from the federal Strategic Petroleum Reserve, and it is calling for the U.S. Senate to approve an alternative fuels bill which would be funded from the rollback of a $17 million
tax break to oil companies (see OW 5/12/2008).
Consumer Watchdog’s calls for regulation come as the Federal Trade Commission is currently investigating price gouging and market manipulation of petroleum products. In response to Congressional Democrats, the FTC in early May issued an Advanced Notice of Proposed Rulemaking, which is the first step in to developing a formal rule defining and prohibit market manipulation in the oil and gas industry. As part of the process, FTC will be seeking public comments until June 23.
FTC hopes to finish the rulemaking process by the end of this year.
