The American Automobile Association (AAA) said Thursday it has asked federal regulators to investigate whether a stretch of mega-mergers in the oil industry has contributed to unstable gasoline prices at the nation’s pumps.
InsertArt(1114506)“THIS SUMMER’S RECORD high increase in gasoline prices —unlike last year — did not involve pipeline shutdowns, refinery outages and the struggle to implement new refining processes,” the AAA said in a release.
“AAA asked the FTC (Federal Trade Commission) to explain to motorists why prices nevertheless have been so unstable.”
The association, the largest organization for motorists and travelers in the U.S. with over 44 million members, said it asked the FTC to examine whether consolidation in the industry, which has already created energy behemoths like BP and Exxon Mobil , has eroded retail competition.
Since the beginning of the year, the oil industry has seen a number of other large deals including Phillips Petroleum’s (P.N) agreement to buy Tosco Corp , and Valero Energy Corp.’s deal to purchase Ultramar Diamond Shamrock Corp..
Both those agreements — as well as the merger between oil majors Chevron Corp. and Texaco Inc. — are still being assessed by the FTC on antitrust groups.
U.S. gasoline prices surged this summer to a record high average of $1.72 a gallon — roughly 5 cents higher than the previous year’s peak — before slipping back to the current $1.39 a gallon, according to AAA’s daily price survey of more than 60,000 service stations.
The AAA also asked the FTC to look into the effect of distinct regional requirements for gasolines, and the impact of increasing the nation’s dependence on corn-based ethanol in anti-smog fuel blends required at a third of the nation’s pumps.
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