WASHINGTON, D.C. ‘ Trade associations representing gasoline marketers and home heating fuel dealers this week issued a national call for meaningful limits on speculation in the energy commodity markets.
In a grassroots call to action this week, the Arlington, Va. based Petroleum Marketers Association of America (PMAA) called on the Commodity Futures Trading Commission (CFTC) to strengthen and approve proposed rules that would set limits on the size of positions that speculators can hold in a given commodity, including gasoline and home heating oil.
‘Due to heavy-handed counter-lobbying by Wall Street and commodity exchanges (who profit from large trading volumes and therefore are opposed to limits on them), the new rule is in serious jeopardy,” said the call to action also sent by the New England Fuel Institute (NEFI), which represents home heating oil companies, to nearly 4,500 of its supporters. They cited the more than 60 years of relative stability in the commodity markets before speculation limits and other common sense regulations were abandoned by Washington and Wall Street.
Sean Cota, current chairman of PMAA and a home heating fuel marketer in Vermont, said meaningful limits will help discourage financial speculators from taking American businesses and consumers for a ride.
‘If commissioners [at the CFTC] fail to approve meaningful limits, there’s no telling how high prices can go,” said Cota.
In last year’s Dodd-Frank Wall Street Reform law, Congress reaffirmed a 1936 law requiring the CFTC to set limits on speculation in order to prevent an ‘undue burden on interstate commerce” that would result from excessive speculation and, as a consequence, cause ‘sudden or unreasonable fluctuations or unwarranted changes in the price” of commodities. It also expands it to all currently ‘dark” markets, including over-the-counter trades and foreign exchanges.
The CFTC is currently vetting the proposed rule, and is accepting public comment until March 28, 2011.
For this week’s call to action, click here:
For a list of more than 50 studies, reports and analyses showing the affects of excessive speculation, click here:
NEFI and PMAA are a member of the Commodity Markets Oversight Coalition, website here:
NEFI is a non-profit, non-partisan member-benefits trade association that represents home heating businesses including Bioheat®, heating oil and propane dealers and related services companies in 31 states.
PMAA is a leading national trade association in the petroleum industry representing 8,000 independent petroleum marketing companies. The association is organized as a national federation of 47 state and regional trade associations who represent wholesalers and retailers of gasoline, diesel, heating oil, lubricants and renewable fuels. PMAA companies own 60,000 retail fuel outlets such as gas stations, convenience stores and truck stops. Additionally, these companies supply motor fuels to 40,000 independently owned retail outlets and heating oil to over 8 million homes and businesses.