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Gas price fixing Original Source Link: (May no longer be active)
http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20020430/bs_usatoday/4069295http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20020430/bs_usatoday/4069295
Gas prices under the influence?
Tue Apr 30, 6:00 AM ET
James R. Healey USA TODAY
Major oil companies are keeping gasoline supplies artificially tight to boost retail prices and refinery profits, according to a report for a Senate subcommittee hearing today on gas prices.
The report, by staff members of the subcommittee's Democratic majority, cites internal oil company documents and interviews with oil executives and analysts. It stops short of accusing the companies of illegal price fixing because the companies do not discuss the measures with one another, though they appear to signal price moves in other ways, the report says.
For example, the report points out that Bill Greehey, CEO of Valero Energy, told reporters in December that Valero recently cut gasoline production and that refiners' profits could rise if others also cut back. ''It's difficult to ascertain'' how that could be anything other than inviting rivals to cut, too, the report says. But Valero spokeswoman Mary Brown says Greehey ''was not signaling. He was stating the obvious fact.''
Oil companies have discussed exporting gasoline, even when demand is high, to keep U.S. supplies tight and prices up, the report says.
Other documents show that a 1999 presentation to senior executives of petroleum conglomerate BP emphasized ''significant opportunities to influence'' the supply-demand equation. BP briefing documents on the Midwest discussed such tactics as giving rivals unspecified incentives to cut fuel shipments, and shipping products other than gasoline in pipelines to delay gasoline delivery. BP told investigators that was just ''brainstorming,'' and none of the actions was taken.
The Senate's Permanent Subcommittee on Investigations, chaired by Sen. Carl Levin, D-Mich., grills oilmen today. Levin says the report ''documents the actions by major oil companies to keep supplies tight and inventories low in order to increase prices and maximize profits.''
The American Petroleum Institute trade group says there is ''no evidence of collusion or other anti-competitive activity by the petroleum industry.''
The Federal Trade Commission shouldn't have allowed oil mergers (news - web sites) that have ''led to higher prices for consumers,'' says antitrust lawyer Steve Sunshine, former head of merger (news - web sites) enforcement for the Justice Department (news - web sites).
''It's a fair question,'' says former FTC antitrust chief Molly Boast, also an antitrust lawyer. But ''the competitive problem was remedied'' before every OK.
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