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No charges filed in gas price probe Photo from AP California Attorney General Bill Lockyer answers questions after a news conference in Sacramento Monday. A probe of the state's high gasoline prices found that oil companies aren't guilty of anti-competitive pricing practices. California's prices are high because of stiff clean air laws, gas taxes and no competition By JORDAN LITE The Associated Press SAN FRANCISCO -- Californians paid $1.3 billion more for gasoline this year than they would have if they lived in states where there's a competitive market for oil, state Attorney General Bill Lockyer said Monday. But oil companies aren't breaking the law with their pricing practices, Lockyer said. Instead, the inflated prices that forced residents in some California communities to pay upwards of $2 a gallon in April when Lockyer started his probe are the result of inadequate competition, California's stiff clean air laws and the state's slightly higher gasoline taxes. "We don't have any evidence that they've done anything criminal or violated anything civil," Lockyer said. But, he said, "the supply is manipulated in a way that produces the highest possible prices, and that is business, that is the American way. "We can't make an antitrust case about these practices yet," he added. "Whether there is collusion or not or zone pricing mechanisms ... is still worthy of investigation." Californians typically spend more at the pump than motorists everywhere but Hawaii and Nevada, which gets most of its gasoline from California. Motorists in California paid an average of $1.32 a gallon between January and August, compared to a high of $1.54 in Hawaii and a low of 89 a gallon cents in Georgia, the report found. Proposed mergers between BP Amoco PLC and Atlantic Richfield Co., and between Mobil Corp. and Exxon Corp. could further stifle competition, especially because 90 percent of California's refining capacity and the retail gasoline market is controlled by six oil companies, Lockyer said. In Texas, the top six oil companies control only 58 percent of the market, he said. Both consumer advocates and oil companies called the report a victory. "The preliminary report's findings confirm what we've been telling the California Legislature for years," declared Dennis DeCota, executive director of the California Service Station and Automotive Repair Association. Chevron Corp. spokesman Fred Gorell said the company was pleased Lockyer had found no evidence of wrongdoing. "We believe that other ongoing governmental investigations will come to the same conclusions," he said. The attorney general said he plans to form a group of consumers, economists and oil industry experts to come up with a plan to lower prices. He said he will lobby the Legislature to pass laws that would force companies to increase their inventories; facilitate imports from outside the state; enable smaller refineries to pool their resources and purchase tankers of crude oil; and free retailers from restrictions on where they can buy their products. Lockyer also said he will "carefully scrutinize the pending mergers of Exxon-Mobil and BP-Arco to see what we can do to restore more healthy competition." The state must review any merger or acquisition to protect against "the erosion of competition in an already concentrated and vertically integrated gasoline market," he said. Prices have dropped in California since Lockyer opened the investigation in April, and in some places gas costs less than $1.50 a gallon. Drivers in the San Francisco Bay area continue to pay about 22 cents a gallon more than those in the Los Angeles area -- a puzzling trend, Lockyer said, because much of the gasoline in California is distributed from area refineries. Lockyer said in the spring that alleged price gouging by oil companies could lead to legal actions to cut high gasoline costs in the state. He said less than half the price increases imposed on motorists in California appeared related to increases in the world price of oil or to accidents that took San Francisco Bay area refineries out of commission. Oil companies answered the state probe with 10,000 boxes of documents. Nationally, the average price of a gallon of gas is $1.3287, according to Friday's latest Lundberg Survey, a review of pump prices at 10,000 gas stations nationwide. Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA