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thomas davison

Watchdog to probe �oil price fix by City traders that drives up cost at the pumps�By Ray Massey
PUBLISHED: 00:20, 14 September 2012 | UPDATED: 00:20, 14 September 2012

..The Government last night announced it will investigate the scandal of oil traders and City speculators allegedly rigging markets to drive up pump prices.

Energy Minister John Hayes said he was so concerned by the alleged abuse that he will ask financial watchdogs to look into the oil market after more than 80 MPs � led by Tory MP Robert Halfon - demanded action over soaring petrol and diesel prices.

He said he would include alleged oil market rigging in the planned investigation into the inter-bank lending scandal (LIBOR) which artificially inflated interest rates for millions of bank customers.

Petrol prices are going up and up, causing a group of MPs to demand action
He will aso ask the Financial Services Authority (FSA) to look into the matter and has instructed his own Civil Servants to �revisit� the issue.

The minister said: �As a result of the arguments that Robert Halfon has put today, I will instruct my officials to do a detailed study, with analysis of how far people have to travel to reach their nearest petrol station and how this can change over time. He can count that as a significant victory.�

He said his own Department�s analysis showed that falls in the oil prices are passed on, but he said: �Nevertheless I am going to ask my officials to look at this matter again, to revisit their analysis, as a direct result of this debate. The Government would be happy to take action again if the evidence legitimises it.

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Petrol price campaigner Robert Halfon, Conservative MP for Harlow called on the Government to regulate the market and imprison those found guilty of such abuses.

Mr Halfon told MPs there was �evidence of dodgy speculators rigging the market and pushing up the price of oil� and that as a result �petrol and diesel have never been more expensive in real terms.�

He said hedge funds and speculators were �rigging the market� - pointing out how pump prices were quick to rise when oil prices soared, but slow to fall when they dropped.

The Office of Fair Trading has already announced a probe into the issue of alleged price-fixing.

MP Robert Halfon wants to know why prices at petrol stations are quick to rise when oil prices go up, but slow to come down when the price falls
But yesterday Mr Halfon told the Commons that the Financial Services Authority should launch a full investigation into UK oil firms, while those found guilty of manipulating the markets should be sent to prison as has happened in the United States.

He cited the evidence of a City oil trader �whistleblower� who had described massive buying pressure on oil futures during the summer to artificially inflate the price.

Mr Halfon told MPs that the �whistle blower� who had given a forensic explanation of how prices are rigged, is a full-time oil trader, who trades the UK oil futures commodity market on a daily basis, but who has asked that his identity be kept secret, to protect his job and his family.

The �whistle-blower told the MP�s researcher: �I trade the oil market on a daily basis, and every day the price is manipulated.

�All through July, for example, there has been a massive buying-pressure on oil futures for August and September 2012. Both were trading at around a $0.5c to $1 dollar premium. This gives a false impression of the market and inflates the price of the nearby oil price, making prices higher on retail markets so pushing up the price of petrol at the pumps.�

The whistle-blower added: �Profiteering seems to be the only objective.�
Speaking in the Commons, the MP said: �There are allegations of price-fixing. This means that even if the oil companies are doing the right thing, the hedge funds and speculators are rigging the price of oil to keep it artificially high.�

He said Germany had acted quickly to stamp out price fixing, while Austria was now regulating its market to stop rigging by speculators. His motion was signed by 82 other MPs from across the political divide.

The debate follows a near 10p a litre rise since early July to near record levels at the pumps. Petrol is now costing 140.07p a litre and diesel 144.38p, according to the AA.

That is up from a summer low of 130.81p for petrol and 136.12 on July 1 adding nearly �20 a month to the fill-up costs cost of a two car family.

The record set in mid-April was 142.48p for petrol and 147.93p for diesel.
Labour�s Fiona O�Donnell (East Lothian) said hard pressed motorists were struggling to cope with the increase in fuel prices at the pumps.

She said: �It is clear to all that there are people who are gaining out of manipulating markets and that consumers are not seeing the benefit when oil prices do fall.�

AA president Edmund King welcomed the move to expose the alleged role of market speculators, saying rising oil prices wwere stifling economic recovery.

Mr King said: �Stock market speculators have regularly seized on every whiff of mildly supportive news to pump up the value of crude, exaggerate its value and maximise the return on their gambling.�

Quentin Willson, national spokesman for FairFuelUK said, �This evidence is a damning indictment of what appears to be rampant bad practice in the

Oil speculation world. If proven, this shows that UK consumers and businesses are being �ripped off� in spectacular style.�

this is just a way of the govt diverting attention away from the huge duty and VAT charged on fuel, 80p a litre goes to our govt, now that's what should be investigated and he can he also look into dodgy Chancellors who have been rigging fuel duty and imprison those found guilty of such abuses?