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Cameron threatens criminal prosecutions after manipulation of oil market emerges

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First LIBOR – now this. Is anyone really surprised?

David Cameron is scrambling to damp down mounting public outrage, saying that he will urgently consider “extending criminal offences” to cover market manipulation (a euphemistic phrase for outright fraud) in the energy sector, after both BP and Shell were raided by European authorities who suspect them of rigging oil prices.

So – as British motorists have been systematically fleeced at the pumps over the last few years while oil companies threw their arms theatrically in the air and blamed circumstance, it seems that geopolitical currents may have played less of a part than the story we were sold suggested, while good old fashioned greed had one hand on the tiller.

Following the LIBOR scandal the government passed new legislation to outlaw manipulation of mortgage interest rates. It looks like a similar law may be heading towards the energy sector.

Mr Cameron said “major consequences will follow” if consumers have suffered as a result.

“The first thing is, these are hugely concerning allegations and if true very, very serious,” he said. “We have to get to the bottom of what happened first before I think we can pass judgement on the way regulators have worked in the UK.

“It’s totally unacceptable for firms to fix prices and force consumers to pay more. That’s why we are looking at how to extend this criminal offence to the energy sector to make sure that those who manipulate benchmark prices feel the full force of the law.”

The Office of Fair Trading is also in the spotlight after its recent investigation cleared the oil companies of any hint of suspicious behaviour. Despite having been warned by a whistleblower in the oil industry that prices are fixed on a daily basis by rapacious traders, the OFT claimed that its investigation had found “no credible evidence” that any manipulation had taken place.

Hmmmm

Written by Cyrus Bozorgmehr - Google+ Profile - More articles by Cyrus Bozorgmehr

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