(Host) The Vermont Fuel Dealers Association is calling for a congressional investigation to determine why gas prices have increased dramatically in the past five months.
The group says it believes that the unregulated trading of future gas commodities is a big reason for the spike in prices.
VPR’s Bob Kinzel reports:
(Kinzel) It was roughly a year ago, when gas prices hovered around four dollars a gallon, that the Vermont Fuel Dealers Association first raised this issue.
VFDA director Matt Cota says the issue lost its sense of urgency when gas prices fell sharply as the recession became more severe. Cota believes gas prices fell because Wall Street firms pulled their money out of gas commodity markets- not because of reduced demand.
And he thinks recent price increases show that his theory is right:
(Cota) "They’ve more than doubled since February but this doesn’t make sense according to the Department of Energy oil demands is at its lowest gasoline demand has dropped by 5% this isn’t supply and demand this is wall Street greed at its worst."
(Kinzel) Cota says his organization has joined with 80 other groups across the country to encourage Congress to stop the unregulated trading of gasoline in the futures commodity market:
(Cota) "We’ve got to figure out a way that we can get this chaos which is these financial markets back in order…and we’re concerned because this is a difficult issue because this is hard to grasp because there are so many things on the plate this won’t get the attention it deserves."
(Kinzel) Joe Chocquette is the director of the Vermont Petroleum Association. He doesn’t think the unregulated markets are responsible for the spike in prices – he blames the increase on higher demand for gasoline across the world:
(Chocquette) "We do see the world of oil as being a world market and crude is traded on markets in the United States, and in England and in Singapore and around the world…we have observed over time that refined product prices pretty closely track changes in crude oil prices on the world market exclusive of what’s going on in the United States."
(Kinzel) Senator Bernie Sanders has formally asked the Federal Commodity Exchange to conduct a thorough investigation of this issue – he says he’s still waiting for a reply:
(Sanders) "There is a record level of crude oil inventory in the United States record level so we have plenty of supply and because of the recession we’re at a ten year low in terms of demand so what economics 101 tell us is when you have a lot of supply and less demand prices should go down but in fact prices right now are soaring."
(Kinzel) Sanders says he’ll introduce legislation calling for a formal investigation if the Federal Commission doesn’t launch its own probe of this issue.
For VPR News I’m Bob Kinzel in Montpelier.