Bakersfield plant subject of FTC Inquiry

The Federal Trade Commission is looking into the Royal Dutch/Shell Group’s proposal to shut down operations of its Balersfield refinery:

The refinery, which Shell says it will shut in October because it’s not economically viable, is one of 13 facilities in California that produce the low-polluting gasoline blend required by state rules. Gasoline inventories in California are tighter than in the rest of the nation.

A U.S. General Accounting Office study released in May found that six oil industry mergers in the late 1990’s lifted U.S. gasoline prices an average of 2 cents a gallon.

“The increased consolidation, which we have found and the General Accounting Office has found and others have found, makes it easier for these companies to engage in anti-competitive behavior,” said Tyson Slocum, research director for Public Citizen, a Washington-based consumer group.

California Attorney General Bill Lockyer and members of the state legislature have asked Shell to keep the facility open, saying that lack of competition in the state’s refining business is lifting prices.

It is hard to imagine how a company could be losing money on a refinery with gas prices where they are today...but it is also hard to imagine how a company could profit from losing revenues and market share.

Link via Not Your Father's America