FTC Closes Bakersfield Probe

No scheme to reduce capacity, raise prices

Published in CSP Daily News

BAKERSFIELD, Calif. -- Concluding what it called a thorough and exhaustive 12-month process, the Federal Trade Commission (FTC) has announced that it has closed its investigation into Shell Oil Products US's decision to close its petroleum refinery in Bakersfield, Calif.

Shell has since sold the refinery to Big West of California LLC, a wholly owned subsidiary of Ogden, Utah-based Flying J. Inc., which intends to keep it operational.

The FTC opened its investigation in March 2004, based on concerns that Shell was shutting the [image-nocss] refinery to reduce capacity in refined petroleum products in an attempt to raise gasoline prices in California. It found no evidence to substantiate this concern.

In voting to close its investigation, the commission issued a separate statement that is available on the FTC's website. It said, After a thorough review of the evidence obtained during the investigation, the Commission has unanimously concluded that there would have been no basis under the antitrust laws for challenging the closing of the refinery even if it had not been sold. Indeed, we found that there was strong evidentiary corroboration of Shell's stated reasons for closing the refinery. There was no evidence supporting a conclusion that Shell possessed, acquired, or exercised market power in any way. Nor was there any evidence suggesting collusion between Shell and any other person to close the refinery.

The vote to close the investigation and issue the statement was 5 to 0.