Report Criticizes Oil Company Mergers

Several major oil company mergers in recent years have left U.S. households vulnerable to higher gasoline and natural gas prices, the Consumer Federation of America said Tuesday.

Because they have fewer competitors, oil companies can allow energy supplies to become tight in their market areas and keep inventories low, the consumer activist group said.

“They push prices up when demand increases because they have no fear” that competitors will keep prices low to steal customers, the group said in a report.

The consumer group said the wave of company mergers had put U.S. refineries under the control of fewer competitors, with more than 20 refineries shut since 1995.

The American Petroleum Institute, an industry trade group, maintains that mergers have cut operating costs for oil companies and that those savings have been passed on to consumers.

High gasoline prices reflect strong consumer demand and a jump in world crude oil prices, which account for about half the cost of making gasoline, the trade group said.

Mergers in recent years include Exxon and Mobil Oil to form Exxon Mobil Corp.; Chevron and Texaco to form ChevronTexaco Corp.; British Petroleum and Amoco to form BP; and Conoco and Phillips Petroleum to form ConocoPhillips.

The head of the Federal Trade Commission, Deborah Majoras, promised West Coast lawmakers in July that she would scrutinize the oil industry and investigate a shortfall in U.S. oil refining capacity.