The US futures industry regulator has alleged that BP tried to manipulate propane prices in the United States by cornering the propane market in February 2004.
"With the knowledge, advice, and consent of senior management, BP employees developed and executed a speculative trading strategy in which BP cornered the February 2004 . . . physical propane market," the Commodity Futures Trading Commission (CFTC) alleged in a 42-page complaint filed in a US district court in Illinois.
But BP denied that any market manipulation occurred and will contest the charges in court, a company spokesman said.
BP has dismissed several employees for failing to comply with its guidelines and co-operated fully with CFTC investigators, Mr Chappell said.
"Market manipulation did not occur and we are prepared to make and to prove that case in courts," he said.
Former BP propane trader Dennis Abbott yesterday pleaded guilty to trying to manipulate propane prices, the US Justice Department said.
Mr Abbott (34) faces five years in prison and a $250,000 fine, and he has agreed to cooperate with investigators, it said.
Employees at BP's US subsidiary sought a profit of at least $20 million through its actions, the CFTC said. BP is the largest supplier of propane in North America.
BP had a "dominant and controlling position" in propane that allowed it to drive prices up above 90 cents per gallon on February 27th, 2004, the CFTC said.
Most of those supplies were going to retain customers in rural areas to heat their homes, the CFTC said.