Call for regulation as MP claims oil price being fixed

Hedge fund managers and speculators are fixing the price of oil, a Tory MP claimed today as he called on the Government to regulate the market.

Robert Halfon, MP for Harlow, said the Office of Fair Trading and Financial Services Authority should now launch a full investigation into UK oil firms, while those found guilty of manipulating the markets should be sent to prison, as has happened in the United States.

He said Germany had acted quickly to stamp out price fixing, while Austria was now regulating its market to stop rigging by speculators.

Oil prices were vulnerable to manipulation like Libor, the interest rate at which banks lend money to each other, he said.

In his motion, signed by 82 other MPs from across the political divide, Mr Halfon said the Government now had to press the OFT to investigate claims of market rigging.

Mr Halfon said he had obtained evidence from one City trader who claimed there was a massive buying pressure on oil futures during the summer to artificially inflate the price.

Speaking in the Commons, the MP said: “If the oil companies have nothing to hide they could opt for open accounting and be much more transparent.

“There are allegations of price-fixing. This means that even if the oil companies are doing the right thing, the hedge funds and speculators are rigging the price of oil to keep it artificially high.”

East Lothian Labour MP Fiona O’Donnell said hard-pressed motorists were struggling to cope with the increase in fuel prices at the pumps.

She said: “It is clear to all that there are people who are gaining out of manipulating markets and that consumers are not seeing the benefit when oil prices do fall.”