Oil firms didn’t plot rate raise, FTC says

From combined dispatches

U.S. regulators looking into the soaring price of gasoline have found no evidence of collusion among oil companies in running up pump costs, a top official said yesterday.

“To date, we have identified no instances of collusion between petroleum companies,” said William Kovacic, general counsel of the Federal Trade Commission, in written testimony to the Senate Judiciary antitrust subcommittee.

“That does not mean that collusion cannot occur, which is why the agency continues to be vigilant in pursuing its enforcement mission,” Mr. Kovacic added.

The Senate panel held a hearing on rising gasoline prices, which the Energy Department said reached a record high this week of $1.78 a gallon.

Oil and gasoline futures prices shot up yesterday, surprising energy traders, after the government reported a decline in supplies.

The price of crude for May delivery rose $1.18 to $36.15 per barrel on the New York Mercantile Exchange, where May gasoline futures moved 3.91 cents higher to $1.113 per gallon.

Mr. Kovacic said the FTC is monitoring wholesale and retail gasoline costs in cities throughout the United States looking for “pricing anomalies.”

In a related matter, the FTC said it is evaluating Royal Dutch/Shell Group’s decision to shut down an oil refinery in California, but has not implemented an official investigation.

Democratic Sen. Ron Wyden of Oregon had asked the agency in February to look into the matter after raising concerns that closing the Bakersfield, Calif., refinery would hurt competition and boost the price of gasoline on the West Coast.

The West Coast has the highest gasoline costs in the United States, with pump prices throughout California above $2 a gallon for several months.

“The issues that you have raised are very important to this agency and will be seriously considered as the agency evaluates the situation with respect to the Bakersfield refinery and determines what course of action, if any, may be warranted,” FTC Chairman Timothy Muris said in a letter Tuesday to Mr. Wyden.

Shell has said it will close the refinery on Oct. 1, declaring the facility is no longer financially viable because local sources of crude oil are declining.

The declining domestic supplies alarmed energy analysts.

“This is the time of year when we’re supposed to be building crude inventories” at a rate of about 2 million barrels per week, said Ed Silliere, vice president of risk management at Energy Merchant in New York.

Instead the Energy Department reported that commercially available oil supplies fell by 2.1 million barrels to 292.2 million barrels for the week ended April 2, leaving nationwide inventories 20.9 million barrels below the five-year average for this time of year. Still, supplies are about 4 percent above year-ago levels.