* Lawmakers urge CFTC to act as gas nears $4 a gallon
* Nearly 70 lawmakers say CFTC inaction has hit US consumers
* Energy costs top election issue for all sides
* Refinery probe continues-FTC chairman (Adds comments from FTC chairman, commissioner)
By Christopher Doering
WASHINGTON, March 5 Democratic members of Congress have urged the U.S. futures regulator to crack down on excessive speculation in oil markets as retail gasoline prices rose toward $4 a gallon and pain at the pump gained prominence in the U.S. election campaign.
The U.S. Commodity Futures Trading Commission should stop "dragging its feet" on implementing new regulations to stop Wall Street from dominating the oil market, 23 senators and 45 members of the House of Representatives said in a letter to the CFTC.
The lawmakers complained that gasoline prices are soaring, despite plenty of supply and low demand.
"As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent, or diminish excessive oil speculation," the members of Congress told the commissioners in a letter.
The letter was signed by Senators Barbara Boxer, Bernie Sanders and John Rockefeller and Representatives Rosa DeLauro, among others. All the signers were Democrats except for Sanders, who is an independent.
U.S. gasoline prices have jumped nearly 30 cents over the past month and now average $3.77 a gallon, according to data released on Monday by the American Automobile Association.
The Energy Information Administration reported on Monday that the average price per gallon was $3.79 in the latest week, up 27 cents or 7.7 percent from a year ago.
Some analysts say there is little evidence of excessive speculation in oil markets and that prices are moving over concerns in the Middle East and strong demand from developing countries such as China and India.
"Congress is rightfully concerned about the economic difficulty that today's high oil prices present to American consumers, but targeting financial speculators simply won't fix the problem that policymakers are trying to solve," said Blake Clayton, an energy and national security fellow at the Council on Foreign Relations in New York.
If concern over Iran sanctions drives oil prices still higher, U.S. retail gasoline prices could rise above $4 a gallon when Americans take to the road for summer vacation season.
REFINERY PROBE ONGOING
Pump prices that high could spell trouble for President Barack Obama as he gears up for the November elections. Obama has been talking up the issue in campaign-style stops in recent days, saying there was no quick fix to the problem. Last week in New Hampshire, he called for an end to tax breaks for the country's prosperous oil and gas companies.
The Federal Trade Commission is also watching for any signs of price manipulation or anticompetitive actions by gasoline refineries as part of an investigation it began last year, FTC Chairman Jon Leibowitz told lawmakers at a hearing.
"We have found some anomalies among refineries. Their utilization rates are going down. Their profits are going up," Leibowitz said.
However, Leibowitz stressed that past FTC investigations into price spikes have found that the price of oil, set on the world market, is the main factor in the price of gasoline.
Last summer, U.S. Attorney General Eric Holder appointed a task force to look at the issue, which included the FTC and CFTC as well as several other government agencies.
That task force has "done nothing but sit on its hands," said Thomas Rosch, a Republican commissioner at the FTC.
"It has been nothing except a charade designed to let the public know, or at least think, that we're doing something about it (gasoline prices). I don't think we're doing anything about it," Rosch said at a hearing .
Republicans, who blame the Obama Administration for the rising fuel costs, say the country is paying for the decisions by the White House to limit offshore oil drilling and delay approval of the Keystone Canada-to-Texas oil pipeline.
POSITION LIMITS DELAYED
The CFTC's groundbreaking position limits rule, contested in courts by the financial industry, aims to restrict the number of contracts a trader can hold in 28 commodities including oil.
The measure was part of the 2010 Dodd-Frank law that was designed to bring tough new oversight to Wall Street.
The futures regulator, straining with a huge workload drafting the new rules, has said it could implement some of the limits by June, and others later this year.
The financial industry sued the CFTC in December, arguing the agency overstepped its bounds by imposing a flawed rule that could harm its members and the public.
Jill Sommers, a Republican commissioner at the CFTC who voted against the position limits, told reporters at a bankers conference that the limits would affect only about six players, and may have little effect on the market.
"Is that really going to change the price?" she said. "I think we've all cautioned against making the leap that just because we haven't imposed the limits yet that means that when we impose them there will be some significant effect on price." (Additional reporting by Timothy Gardner and Roberta Rampton; Editing by Russell Blinch, Lisa Shumaker and Jim Marshall)