Tester investigates rising gas prices
It’s time to get to the bottom of rising oil prices, senator says
The senators want to know why, despite a sufficient worldwide supply, oil now sells for nearly $90 per barrel. Higher oil prices result in higher gas and diesel prices, higher home heating bills and more expensive groceries.
During a joint subcommittee investigation today on Capitol Hill, Tester and his colleagues examined how speculation in the crude oil market artificially drives up oil prices. Speculation is when investors sell crude oil based on future predictions rather than actual oil supply.
“The cost of oil right now defies the rules of supply and demand and it’s taking a toll on a lot of hardworking families, small businesses, agriculture and industry in Montana,” Tester said. “When it comes to Big Oil and the companies that speculate and trade, there needs to be some checks and balances.”
Tester added that in the past 15 years, the price of a barrel of oil has gone from selling consistently at around $20 in the 1990s to $66 per barrel in 2006. It is projected to average $72 per barrel in 2007 with a possible increase to nearly $85 per barrel on average in 2008.
Tester said the issue also highlights the need to pass an energy bill that creates an overall strategy for producing and conserving energy.
The 2007 Energy Bill, which Washington Republicans blocked last week, would have also eliminated tax breaks for major oil companies.
“I don’t know about my Republican colleagues, but I didn’t see a good reason for giving breaks to companies that make billions in profit at the expense of working folks,” Tester said.
This is Tester’s second committee hearing investigating consumer issues in a week. Last week, Tester criticized the credit card industry for raising interest rates on cardholders whose credit scores drop, even if those cardholders pay their bills on time.