Nevada officials concerned about lack of refinery competition
A California official’s conclusion Tuesday that lack of competition among refineries there results in high gasoline prices mirrors the concerns of three Nevada officials who had sought probes of the high prices.
And spokesmen for two say they have added worries about reduced competition if proposed mergers of large petroleum firms are approved.
California Attorney General Bill Lockyear blamed lack of competition for high California gas prices that cost that state’s drivers $1.3 billion more this year than if they would pay in states with more competition among oil refiners.
U.S. Sen. Richard Bryan, D-Nev., and U.S. Rep. Jim Gibbons, R-Nev., both called for federal investigations early this year as gas prices increased. So far, those investigations have not been completed, their spokesmen said Tuesday.
Steve George, spokesman for Nevada Attorney General Frankie Sue Del Papa, said the office was a partner with California in the investigation and shares concern about inadequate competition among California gasoline producers.
Industry sources said Exxon Corp. and Mobil Corp. are offering to sell or break ties to 15 percent of their national network of service stations to win government approval of their $81 billion merger, the Associated Press reported Tuesday.
Industry officials familiar with the negotiations confirmed that the FTC is seeking the divestiture of an Exxon refinery in Benecia, Calif., and up to 2,400 stations under both flags, as reported in The Wall Street Journal on Tuesday.
Texaco and Shell combined their refining and marketing operations two years ago, according to the Journal.
‘Six refineries have 90 percent of the market in California,” George said. “In Texas, the top six refineries have only 60 percent of the market.”
He said the Nevada AG’s Bureau of Consumer Protection is looking into proposed mergers of refinery-owning companies. If it appears the mergers would further decrease competition, George said, the AG could intervene on behalf of the state’s consumers.
Gibbons’ aide Robert Uitoven said a probe by the U.S. Department of Justice has issued no report as of Tuesday. That investigation had been requested after a three-page report from a U.S. Department of Energy investigation was unsatisfactory to the congressman.
Dave Lemmon of Bryan’s Washington, D.C., office said an investigation by the Federal Trade Commission is “on-going,” and that he was told there was no estimate when it would be concluded.
“That’s pretty much standard operating procedure on these sort of investigations,” Lemmon said.
He said Bryan also is monitoring the proposed oil company mergers closely, concerned by possible loss of competition.