Oil speculation -- not supply and demand -- has been driving up the price of gasoline almost daily. Gas is hovering around $3.70 a gallon as oil bounces around $100 a barrel.
The price of oil is up because speculators are buying oil futures as they figure the situation in oil-rich Libya might reduce the availability of oil.
The problem here is that these oil speculators aren't using cash to buy the oil futures.
They are essentially buying on credit, posting as little as 6 percent of the value of the futures contracts.
Stock traders have to provide at least 50 percent of the value in order to buy.
Three years ago, when oil and gasoline prices shot up because of rampant speculation buying, we (as well as many others) urged Congress to take the lead on writing rules that would curb this wild, dangerous speculation.
Action was taken last year but the changes have not been fully implemented.
Now is the time to move.
And, according to a report in the Kitsap Sun, a dozen U.S. senators (including Washington's Patty Murray and Maria Cantwell) have written a letter to federal commodities regulators to cap oil speculation.
The senators are asking for increases in margin requirements for speculative oil contracts. Such power over the commodities exchanges was granted to the commission in legislation passed last year, the Sun reported.
"There is strong evidence the recent surge in gas prices has little to do with the fundamental supply and demand for oil," the senators wrote. "... We urge you to restore integrity to our energy markets by exercising the CFTC's authority to require higher margin levels for speculative oil futures contracts."
It's particularly important for regulation and oversight in this area because gasoline is a commodity that has become essential like water and electricity. It's reasonable to allow those who deal in these products to make a fair profit.
But, as a nation, we simply can't afford to allow the supply of this critical resource to be manipulated in an effort to gouge consumers and make obscene profits.
"Last year, we gave the financial cops the tools they need to rein in rampant Wall Street speculation," Cantwell said. "Today, we're asking them to put those tools to use. It's time for Wall Street to stop the reckless gambling on what it costs for Washingtonians to fill up their gas tanks."
The escalating price of fuel is taking a huge toll on the nation's economy, and our personal finances.
Congress took action last year aimed at this problem. It now needs to follow through to make sure regulators curb the rampant speculation that's putting this nation at risk.