Sen. Dianne Feinstein (D-Calif.) is calling for a federal investigation to determine whether "an illegal short squeeze" is responsible for the soaring price of gasoline in California, which hit another record high Monday.
With a regular gallon now costing $4.669, the third all-time high in a row, Feinstein is urging the Federal Trade Commission to look into doubts that "the price spike and supply disruption are related to supply and demand," she said.
In a letter Sunday to Jon Leibowitz, the agency's chairman, Feinstein accused the FTC of "failing to take action to protect California consumers from malicious trading schemes in the California gasoline market."
In the letter, Feinstein referenced data showing statewide gasoline production last week at nearly the same levels as a year ago. She also pointed to reports demonstrating that stockpiles of gasoline and blending components were equal to last year's.
The information "appears to confirm that market fundamentals are not to blame for rising gas prices in California," despite recent pipeline and refinery woes, she wrote.
Instead, Feinstein raised suspicions of possible collusion. In her letter, she asked the FTC to set up an oversight unit to permanently monitor the oil and gas market for fraud, manipulation and other unsavory activities.
"Paying hundreds of dollars to fill your tank every time you go to the pump in untenable," she said in a statement.
Analysts said Monday that the pace of price increases is slowing, raising hopes that the upswing could end as early as Monday. On Sunday, Gov. Jerry Brown moved to ease gas-blend requirements to help boost supply.
Drivers are paying well over $5 for a gallon of regular gas at some Southern California stations, according to GasBuddy.com.