Pennsylvania Petroleum Marketers & Convenience Store Association this week called on Congress to take action immediately to plug legal loopholes that allow oil speculators to drive up the cost of energy and reap record profits.

“Everyone agrees one of the biggest factors in high oil prices is oil speculation by hedge funds and investment bankers,” said John V. Kulik, Executive Vice-President, Pennsylvania Petroleum Marketers & Convenience Store Association. “Some experts say as much as 60 percent of the cost of a gallon of gasoline or heating oil can be attributed to pure speculation and abusive trading practices.”

“Petroleum product distributors are at the mercy of oil speculators just like consumers,” Kulik explained. “We have no control over the price of oil, but we see the results of speculation first-hand from our consumers who are paying the bill.”

The U.S. Senate is set to act on legislation sponsored by Senate Majority Leader Harry Reid that would give the federal Commodity Futures Trading Commission more authority to limit oil market speculation and increase transparency in the future markets. This action follows weeks of hearings on the subject in Congress.

Pennsylvania U.S. Senator Bob Casey co-sponsored the legislation saying, “I strongly believe that we need long-term solutions for our energy future. But I also know that Pennsylvanians need short-term relief, especially with high gas prices and the winter heating oil season just around the corner. The Stop Excessive Energy Speculation Act will rein in the middlemen who are increasing our gas prices through unregulated and undisclosed trading.”

“We want to applaud the Senate for taking this step to bring the oil speculation issue into the light of day and urge an immediate vote to support the Reid bill,” said Kulik. “While there is no silver bullet that will solve the entire problem, this is a major step forward.”

“We also want to thank Senator Bob Casey for co-sponsoring this important measure,” said Kulik. “He realizes how much oil speculation is hurting homeowners and drivers across the state and we’re glad he’s on our side.”

PPMCA raised a warning flag about the impact runaway oil speculation will have on heating oil and propane customers this winter.

“Oil speculation has driven the cost of oil from $75 dollars a barrel in July 2007 to more than $131 a barrel today, almost double the price. Natural gas and other fuel costs have also increased dramatically in the last year, lead by the oil markets,” said Kulik. “Our customers who depend on these fuels to heat their homes could be facing a doubling of their heating costs starting this fall.”

“We urgently need Congressional action now to reign in oil speculators before the fall heating season and before our customers have to make some very difficult choices about how to pay for their heating bills,” said Kulik. “We also urge Congress to increase funding for the Low-Income Home Energy Assistance Program to help those most in need deal with these dramatic cost increases.”

The Pennsylvania Petroleum Marketers & Convenience Store Association is a not-for-profit trade association representing independent petroleum marketers at both the wholesale and retails levels and firms supplying petroleum products and other related services.

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Stop Oil Speculators, Send Congress An S.O.S.

7/25/2008