Rowe Finds Gas Price Spike Blame Lies Outside Maine; Asks Congressional Delegation For Help

October 13, 2005

Attorney General Steve Rowe today wrote a letter to the members of Maine's Congressional delegation asking them to use their influence to get the federal government to immediately commission an independent, professional, in-depth study of petroleum markets. Rowe said he believes such a study is necessary to form the basis for fundamental reforms designed to stabilize and rationalize petroleum markets in the interest of American consumers. Rowe said that his office's monitoring of retail and wholesale petroleum prices over the past six weeks had convinced him that the source of the price volatility problem is not in Maine. He pointed instead to refiners and futures market speculators, which are beyond Maine's borders.

Rowe said in his letter: "Current market structures have the effect of enhancing the profits of refiners, traders and speculators while threatening the livelihoods and lives of millions of Americans. Specifically, it appears that current elevated prices and unprecedented market volatility may be traceable to: (1) the increasing concentration of the United States refining industry; (2) permissive rules and oversight governing the New York Mercantile Exchange (NYMEX), the commodities market where petroleum futures are traded among petroleum companies, speculators, and hedge funds; and (3) the unregulated operations of the off-exchange market in over-the-counter derivatives."

Rowe said, "I will continue to work with other State attorneys general and with Governor Baldacci on state initiatives, but I think our Congressional delegation is in the best position to make progress on the broader market issues."