This summer, Western countries staged the first release of "strategic oil stocks”. This was supposed to cut petrol prices for struggling motorists.
However, enquiries by Harlow MP Robert Halfon now indicate that much of the oil was diverted away from consumers, and sold instead to major American banks.
Experts now fear that banks hoarded the oil, instead of selling it to motorists, and are likely to enjoy huge profits as a result.
Earlier this summer, as oil supplies from war-torn Libya dried up, the United States, UK, and other governments across the world released 60 million barrels of oil from their strategic reserves (1). These were intended to ease the pressure on oil prices and the wallets of families and small businesses, already suffering from price and tax increases.
But although the release knocked the pump price of petrol down a few pence, it quickly rose again. It now appears, according to an obscure "bid list" that has emerged recently from the U.S. Department of Energy (2), that banks like JPMorgan bid over 150 million dollars to secure parts of the strategic oil stocks. Instead of selling these on to motorists, they appear to have hoarded the cut-price oil on offshore tankers, waiting for prices to rise.
Harlow MP Robert Halfon said: "Whilst motorists are now paying up to £1.50 a litre for petrol, some banks appear to have been starving them of the very oil that was meant to reduce prices. If it is true, this is outrageous. We urgently need cheaper petrol, to get our economy moving again.”
A few days ago, one of the first actions of the the new head of the International Energy Agency was to halt the release of strategic oil reserves. Despite taking steps to shut down the scheme, the IEA officially claimed that the policy had been "a success" (3).
In addition, it appears that in recent years, JPMorgan has a long record of profiting from oil speculation. In 2009, the financial news group Bloomberg alleged that the U.S. bank had rented a ship for up to $40,000 dollars a day, to hoard over 200,000 tons of heating oil on a supertanker off the coast of Malta, waiting for its price to rise (4). These reports were later confirmed by shipping firms Oslo-based SeaLeague A/S, and Athens-based Optima Shipbrokers Ltd. (5).
Experts fear that this kind of speculation has prevented petrol and diesel from entering circulation in the market. In turn, this has kept prices high for those who pay through the roof to heat their homes and fill up the family car.
Mr Halfon has campaigned for months against high petrol prices. He said: "Whilst motorists and households feel the squeeze, it’s business as usual for the banks. The Government must clamp down on this. That's why I have tabled a FairFuelUKe-petition calling for cheaper petrol. So far it has got 85,000 signatures. If we get to 100,000, we can force an MPs debate in Parliament.
I urge everyone to sign the FairFuelUKe-petition here:http://bit.ly/FFUK-Gov
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