NUMBER 10 has admitted that manipulating oil prices is not currently a criminal offence and is looking to make changes to the law, following an EU probe into price fixing that has rocked the industry this week.
Following the Libor scandal, when banks were accused of manipulating interbank lending rates, the government created new laws which made it an offence to manipulate the mortgage interest rate.
Prime Minister David Cameron said yesterday that it is “totally unacceptable” for any company to attempt to fix oil prices and he is looking to extend the laws relating to Libor into the energy sector.
A spokesperson for Number 10 told City A.M. that “following Libor, the government has legislated to create a new criminal offence for manipulating all benchmarks”.
Earlier this week, oil giants BP, Shell, Norway’s Statoil and Italy’s ENI all confirmed that they are under investigation by the European antitrust regulator, under the suspicion of colluding to distort prices. Leading oil price reporting agency Platts is also under review.
BP is under additional pressure this week, due to spiralling costs from compensating US companies for the 2010 Deepwater Horizon disaster. BP is worried about payouts putting it in financial jeopardy and wants Cameron to raise it with the US government, BBC News has said.