FSA blamed for oil price rise

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The Financial Services Authority (FSA) had "let the British people down", said Professor Michael Greenberger, a former official at US regulator the Commodity Futures Trading Commission (CFTC).

He said if the FSA stepped in to stop speculation, the price of petrol at UK pumps would fall.

Oil prices soared through past 140 US dollars a barrel last month, contributing to increased fuel costs for British motorists.

Prof Greenberger said the rise was driven by traders speculating on the futures market, making money by gambling on the price of oil, and he called for tighter US-style regulation.

In an interview for BBC Radio 4's The Investigation to be broadcast on Thursday night, Prof Greenberger, former director of the CFTC's trading and markets division, said: "The FSA has let the British people down.

"If the FSA adopted limits on speculation, you would see the price of gasoline drop in the United Kingdom."

An FSA spokeswoman refused to comment on Prof Greenberger's claims, but said the rise in the oil price was not purely down to speculators.

She said: "We have a very good relationship with the CFTC. We regulate oil speculation in a slightly different way to how they do, but the end result is the same."

The FSA agreed with the Treasury's view that the price rise was the result of global supply and demand, she added.