As Gas Prices Spike, Cantwell Introduces Bill to Target Petroleum Market Manipulators & Protect Consumers at the Pump

As Gas Prices Spike, Cantwell Introduces Bill to Target Petroleum Market Manipulators & Protect Consumers at the Pump

Gas prices hit $5.57 in Washington, the highest average price ever; Puget Sound diesel prices are over $7 a gallon; Act would monitor fuel market anomalies that hurt consumers; bad actors would face up to $2 million per day in fines

WASHINGTON, D.C. - Today, U.S. Senator Maria Cantwell (D-WA), ranking member of the Senate Committee on Commerce, Science, and Transportation and senior member of the Senate Finance Committee, introduced the Transportation Fuel Market Transparency Act.

The bill would create a new Transportation Fuel Monitoring and Enforcement Unit at the Federal Trade Commission (FTC) dedicated to proactively monitoring and preventing fraud or manipulation that may be artificially inflating pump prices, increasing price transparency in transportation fuel markets, and increasing penalties for bad actors. In the past, unscrupulous oil traders have taken advantage of volatility and supply disruptions to profit at the expense of consumers.

"This legislation couldn't come at a more needed time as drivers in Washington and all across the country face record breaking pump prices," said Sen. Cantwell. "Protecting American households and businesses requires forcing the same level of transparency in fuel markets that we successfully fought to secure in other energy markets. This legislation will put a full-time policeman on the beat able to shine a bright light on the mysterious middle of gas markets and go after any bad actors that are exploiting consumers."

Today, gas prices in Washington state hit $5.57 per gallon - the highest in state history.

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The bill was co-introduced by U.S. Senators Ron Wyden (D-OR) and Alex Padilla (D-CA).

The Transportation Fuel Market Transparency Act:

• Strengthens Oversight. Enhances the FTC's 2007 authority to go after false market information designed to artificially inflate transportation fuel prices, including data submitted to private-sector price reporting agencies. The legislation broadens the FTC's oversight authority to cover the full range of transportation fuels, including biofuels.

• Ensures Dedicated Market Monitoring. Establishes a new Transportation Fuel Monitoring and Enforcement Unit at the FTC devoted to protecting the public interest by continuously and comprehensively monitoring and analyzing crude oil, gasoline, diesel, home heating oil, and other petroleum distillate markets in order to facilitate transparent and competitive market practices.

• Targets Bad Actors. The new unit at the FTC is also charged with identifying any manipulation, reporting of false information, use of market power or any other unfair method of competition employed to distort transportation fuel markets to accrue illegal profits, and advising the full Commission whether to go after the perpetrators and impose relevant penalties.

• Increases Penalties. Doubles the maximum penalty for manipulating wholesale oil markets to $2,000,000 a day for each violation.

• Improves Market Transparency and Competition. Directs the Energy Information Administration to collect, analyze, and publish more detailed information related to the quantity and pricing of transportation fuels in order to facilitate price transparency, fair competition, and compliance with relevant international sanctions. This data may also be used to facilitate enhanced FTC efforts to police the transportation fuel markets.

A one-page summary of the Transportation Fuel Market Transparency Act is available HERE.

The full bill text is available HERE.

As Chair of the Committee, Sen. Cantwell led the initial introduction of this legislation in the 117^th Congress, and it passed out of the Commerce Committee in May 2022. In April 2022, Sen. Cantwell held a hearing that revealed how a lack of oversight and visibility into petroleum trades affects prices at the gas pump. The bill was also introduced in the 118^th Congress.

Sen. Cantwell has long sought to protect consumers from unjustified energy prices. In the aftermath of Enron's energy trading schemes, she authored an amendment to the Energy Policy Act of 2005 that strengthened the Federal Energy Regulatory Commission's (FERC) authority to investigate and punish market manipulation in the electricity and natural gas markets.

Since then, FERC has built a permanent cadre of internal energy experts that continually monitor and investigate anomalous market trends and suspicious behavior. In the wake of the 2008 Financial Crisis, Sen. Cantwell authored legislation that gave the Commodities Futures Trading Commission (CFTC) similar anti-market manipulation authority and responsibilities in financially-settled energy commodity derivatives markets.

A Sen. Cantwell addition to the 2007 Energy Bill gave the FTC virtually identical anti-market manipulation authority and responsibility to oversee wholesale crude oil and petroleum markets. However, unlike FERC and the CFTC, the FTC has not used their authority to protect American consumers.