High Gas Prices: Result of Bush DOJ Allowing Many Mergers

[DesEtoiles]

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aI43GNSYkDDQ&refer=news_index

Last Updated: May 17, 2004 00:35 EDT

Gas Price Surge Under Bush Follows Unchecked Refinery Mergers

May 17 (Bloomberg) -- President George W. Bush allowed an increase in oil refinery mergers to go unchecked since he took office and may have contributed to the highest gasoline prices in 20 years as the November election approaches.

The Bush administration approved 33 takeovers totaling $19.5 billion, on top of 21 deals worth $7.3 billion under President Bill Clinton, Bloomberg data shows. Reduced supplies were already pushing up gas prices in Clinton's term, according to a Federal Trade Commission study conducted after pump prices rose to more than $2 a gallon in Milwaukee and Chicago in 2000.

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Refiners Benefit

Under Bush, the FTC hasn't tried to block any proposed refinery takeovers. During Clinton's eight years in office, the government sued once to block an oil industry merger. In February 2000, the FTC sought to stop BP Plc's $33.1 billion purchase of Atlantic Richfield Co. after concluding the combination could lead to higher prices of oil pumped from Alaska. BP completed the purchase in April 2000 after agreeing to sell oil fields in Alaska and terminals and pipelines in Oklahoma.

The rise in gasoline prices helped refiners generate the highest margins from refining crude oil into gasoline and other fuels in the first quarter since at least 1990. ConocoPhillips, the largest U.S. oil refiner, last month posted its biggest quarterly profit since the 2002 acquisition that formed the company. ChevronTexaco Corp., the second-biggest U.S. oil producer, said earnings rose 33 percent to the highest level since a 2001 merger formed the company. Chevron's first-quarter refining profit doubled.

[Coastie for Truth]

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