LOS ANGELES (CBS) — Were those record California gas prices the result of collusion?
That’s what Dianne Feinstein wants to know.
California’s senior senator Sunday asked the Federal Trade Commission to probe exactly how gas prices skyrocketed in such a short period.
In a letter to the FTC, Feinstein asked if the prices went up as a result “of an illegal short squeeze” engineered by a handful of companies that refine gas in the state.
Feinstein also questioned if Tesoro Corporation — whose refinery in the South Bay went down for maintenance — was taken advantage of by other gas suppliers “either through collusion or the use of market power.”
“Publicly-available data appears to confirm that market fundamentals are not to blame for rising gas prices in California,” the California democrat wrote in a letter to FTC chair Jon Leibowitz.
Feinstein also called on the FTC to monitor energy price and production data gathered by other government agencies, to watch for “fraud, manipulation or other malicious trading practices.”
She also asked the FTC to establish a permanent gas and oil oversight committee, similar to the Federal Energy Regulatory Commission’s oversight of natural gas.
Feinstein said, “California consumers are all-too-familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity.”
She reminded the FTC of past frauds, like the 2000-2001 electrical crisis, which turned out to have been caused by market manipulation by Enron and other traders. That fraud cost the state an estimated $40 billion, caused rolling blackouts, and is cited by many historians as having cost Gray Davis his job as governor.