NEFI President Addresses Lawmakers on Excessive Speculation Legislation

Michael C. Trunzo, president and CEO of the New England Fuel Institute, commended Sens. Sanders, Blumenthal, Nelson, Merkley, Franken and Whitehouse along with Representative Hinchey on June 15 on the introduction of legislation to address excessive speculation in the commodity markets. Trunzo said:

 ‘On behalf of the New England Fuel Institute, which represents the home heating oil industry in the six New England states, I would like to commend Sens. Sanders, Blumenthal, Merkley, Franken and Whitehouse, as well as Rep. Hinchey, on the introduction of this legislation, the ‘End Excessive Oil Speculation Now Act.’

Despite the fact that it’s summer, the average price for a gallon of home heating oil is currently $3.10. For the nearly 2.6 million New England homeowners who use heating oil, and the 2,000 mainly small, family-owned and operated businesses that serve them, the current pricing structure is a major financial strain. And it goes beyond just heating one’s home. It relates to rising costs of gasoline, transportation and groceries as well.

Retail heating oil dealers are facing strained lines of credit with banks and oil suppliers. Our members are finding it difficult to grow their businesses and keep their existing workforce employed, never mind hiring new employees.

And their customers are wondering:

 ‘Why is the price so high? Is there a supply crisis?’

When you answer ‘No,’ they say, ‘So why are you gouging me?’

It’s hard to explain to them, but I think the American people and more importantly, Washington, are beginning to understand that your home heating oil dealer does not profit from high commodity trading prices.

NEFI is proud to have supported measures included in last year’s Dodd-Frank Act that we had hoped would:

Bring transparency to the market;
Restrain excessive speculation;
Close loopholes that allow speculators the same trading status afforded to companies that actually take delivery of or use the product.

Unfortunately, the Commodity Futures Trading Commission (CFTC) is delayed in implementing these protections, including speculative position limits, which were to have been imposed by Jan. 17 of this year. We are six months down the road and the CFTC tells us that we are potentially another six months away from the rulemaking. This is unacceptable, as heating oil customers cannot go through another winter of volatile pricing.

This legislation would help the situation, at least until the CFTC can step up to the plate, fulfill its obligations and enforce these new rules. This bill is good for my members and it’s good for their customers.”