MARK LARSON

Perspective

An economy struggling under the weight of record-high oil prices is forcing families and businesses across the Mountain West to take unprecedented steps to balance their budgets.

It is no surprise that individuals are driving less and opting for "staycations" over traditional summer travel. But farmers, ranchers, grocers and restaurateurs are also struggling to cut corners and endure shrinking profit margins. Meanwhile, manufacturers are cutting jobs and producing less, driving up the prices of consumer goods. Even school districts are examining scheduling options, busing routes and fuel expenditures to find new ways to make ends meet.

While most of us are hurting, somebody is profiting from our pain. And it is only natural for motorists standing beside their vehicle watching their totals at the pump climb over $75 or even $100 for a fill-up to look across the lot to the station attendant or owner in frustration. They can't help but think: Surely they are scoring a jackpot by enjoying gas prices north of $4 a gallon.

But gas station owners and operators are not to blame. In fact, we are hurting as much as consumers by these outrageous gas prices. According to data from the National Association of Convenience Stores, last year the average gallon of gas was marked up 14.3 cents by owners. The net margin currently is only about 1.5 cents per gallon after all overhead and operating expenses are considered. Each gallon of gas sold typically generates more revenue for refiners, wholesalers, state and federal tax agencies, and even credit card companies than it does for gas station owners. Our main source of profit is not from gas, but from sales in our convenience stores.

The real culprits are oil speculators who have artificially driven prices through the roof by aggressively trading oil futures. Historically, futures markets were an important way for businesses in industries that depend on fuel - such as shipping, tourism or agriculture - to ensure some amount of price predictability. But in the last five years, the amount of investor holdings in commodity index funds has skyrocketed from $13 billion to more than $260 billion. Currently, 71 percent of the commodity futures contracts are owned by speculators, up from 37 percent in 2000. These investors trade oil on paper - often changing hands dozens of times - which drives up the price without ever having the intention of actually taking possession of the oil.

For this reason, Republicans and Democrats in Congress need to work together to correct this market manipulation and bring more transparency to the pricing of oil. The Colorado Wyoming Petroleum Marketers Association supports legislation that would empower the Commodity Futures Trading Commission to more closely monitor the trading of commodities and take reasonable measures to reign in oil speculators. We need to close overseas loopholes that encourage speculation and set limits on certain speculation practices, especially those of foreign traders who are able to operate virtually unchecked.

With hundreds of billions of dollars changing hands in futures markets, immediate action is needed. We urge Congress, upon its return in September, to pass legislation that will help address both short-term and long-term problems related to rising fuel costs.

Gas stations owners across Wyoming and Colorado would be as relieved as consumers to get some relief from skyrocketing prices.

Mark Larson is executive director of Colorado Wyoming Petroleum Marketers Association.