Big Oil: Slowing Supply.
The report is based on internal oil company documents that raise questions about anti-competitive practices among leading oil companies, Wyden says.
With the industry blaming high gasoline prices on insufficient refinery capacity and costly environmental regulations, Wyden's report reveals that oil companies may have worked to contrive tight supplies.
"These documents raise significant questions about whether America's oil companies tried to pull off a financial triple play, boosting profits by reducing refinery capacity, tagging consumers with higher pump prices and then arguing for environmental rollbacks and additional financial incentives," says Wyden.
In memos detailed in the 11-page Wyden report, oil companies articulate a desire to reduce oil and gasoline supply. One document from Texaco reads, "Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline in order to increase prices and grow profit margins."
Oil company competitors also discuss mutual opportunities to control oil and gasoline supply, thus keeping markets tight. In one case, a Mobil document concerning an offline small refiner in California states, "Needless to say, we would all like to see Powerine [an independent refiner] stay down. Full court press is warranted in this case."
"I started investigating high gas prices in Oregon back in early 1999, and in the two years since, it's become clear that America's gasoline crunch is much more than a simple case of supply and demand," Wyden says. "This report raises more serious questions about whether anti-competitive and anti-consumer practices are keeping the markets from working the way they should -- and hurting American consumers in the process."
In 1999, Wyden first launched his own investigation into possible antitrust violations in the oil industry. His 1999 report was the initial basis for a Federal Trade Commission investigation and revealed anti-competitive gas pricing in the Pacific Northwest.
Wyden's probe showed that the industry engages in zone pricing and discrimination against independently owned gas stations.
Earlier this year, at a hearing of the Consumer Subcommittee of the Senate Commerce Committee, Wyden introduced another oil company memo revealing ARCO's intent to "keep the West Coast market tight" by exporting gasoline to Asia.
Wyden is calling for a ban on exports of Alaskan North Slope crude oil.
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|Title Annotation:||to increase profits petroleum industry reduces gas supply and drives up prices|
|Article Type:||Brief Article|
|Date:||Jul 1, 2001|
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