The huge increase in oil prices has had a ripple effect on Americans.
Airlines, trucking companies, farmers and consumers are feeling the pain. There’s been an increase in the number of gas runoffs at gas stations and gas can thefts from boats and now, Twin Cities commuters could be paying higher fares for buses and trains this fall.
According to Congress, much of the blame should go to large investors for their role in propping up oil prices. Pension funds, Wall Street banks and other large investors that have no intention of taking delivery of fuel have increasingly pumped money into contracts for oil and other commodities as a hedge against inflation when the dollars falls, according to the Associated Press.
Lawmakers must move forward with tightening restrictions on pension funds, investment banks and other large investors.
Certainly, the dramatic rise in gas prices is complicated. Fingers can be pointed at the falling dollar, unrest in the Middle East and increased demand from China, India and other countries.
However, lawmakers note that speculation in crude futures has nearly doubled since 2000. And some people have said the large investors have taken advantage of loopholes that let them bypass speculative limits imposed by U.S. regulators.
Time to close the loopholes.
A range of remedies from higher margin requirements and stricter position limits on investors is being discussed by Congress. And yet, lawmakers must be careful not to drive traders out of the U.S. markets at they consider the changes.
But at this point, maybe it’s time to take that risk in an effort to reduce fuel costs.