Wolf Cosponsors Pump Act

Statement

WOLF COSPONSORS PUMP ACT

Measure Aimed at Protecting Consumers from Price Manipulation at Gas Pump

Rep. Frank Wolf (R-10th) today announced that he is cosponsoring the PUMP Act, bipartisan legislation aimed at protecting consumers from price manipulation at the gas pump.

The Prevent Unfair Manipulation of Prices Act (H.R. 594) would bring enhanced oversight and transparency to the energy futures market, subjecting all energy markets to the same federal regulations, according to Wolf.

"I understand the serious impact that rising fuel prices are having on the everyday lives of people and the strength of our economy," Wolf said. "While there are many uncontrollable factors ranging from global supply and demand to production cutbacks by oil producing countries to refinery capacity that determine the cost of a gallon of gasoline, I believe that the federal government must also investigate the effect that oil market speculators have on gas prices.

Wolf said that he has become concerned that unregulated over-the-counter oil futures trading could be artificially inflating the price of oil and gas.

"Energy commodities trading in crude oil, gasoline, diesel fuel, and natural gas traditionally has taken place on the New York Mercantile Exchange with oversight by the Commodity Futures Trading Commission," Wolf said. " But today an increasing amount of trading is happening in off-market deals, known as ‘over-the-counter' (OTC) trading. It is estimated that up to 50 percent of all energy trades are over-the-counter, where speculation occurs without any regulation or oversight by the federal government."

"Without effective oversight, there is no way to know whether energy speculators are basing their oil trades on market realities or speculation based on fear and greed at the expense of hard-working Americans," Wolf continued.

Wolf said the PUMP Act (H.R. 594) would bring OTC trading under the oversight of the government and also increase penalties for speculators found to be unfairly manipulating the oil futures market. It is estimated that oversight over all futures trades could lower the price of a barrel of crude oil by as much as $25.

"Ultimately, America must find ways to curb its dependence on foreign oil and become more energy independent," Wolf said. "I support efforts to increase conservation, develop alternative fuels, tap domestic sources of energy, as well as making the machines we use, especially automobiles, more energy efficient. Rest assured that I will continue to work to find both short- and long-term answers to the country's energy needs."

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