Should Lead To Greater Scrutiny Of Refiners Nationwide
Santa Monica, CA — The Foundation for Taxpayer and Consumer Rights (FTCR) called the preliminary details about Shell Oil’s $130 million sale of its Bakersfield refinery to Flying J Inc. a victory for California motorists and a signal to the domestic refining industry that its artificial restriction of supply to drive up gasoline prices will not be tolerated. This is the first known instance of an American oil company being forced to keep open a refinery after seeking to close it.
Shell had originally planned to close and demolish the Bakersfield refinery on October 1st. With the help of whistleblowers, FTCR exposed a series of internal documents from Shell that showed the company was closing its highly profitable refinery, despite ample crude supply, very likely in order to drive up gasoline prices. The disclosures led to pressure from California Attorney General Bill Lockyer and US Senator Barbara Boxer that forced Shell to keep the refinery open through March and find a buyer. (Click here to read FTCR’s first press release.)
“The campaign that kept Bakersfield’s refinery running should be a national example to Big Oil that attempts to artificially reduce supply in order to hike gasoline prices will not be tolerated by the public, regulators and legislators,” said Jamie Court, FTCR’s president. “California motorists will save big at the pump because preserving 2% of the gasoline supply and up to 10% of the state’s diesel will create an inventory that wards against shocks to the commodities market which send gas prices sky high. This is a national model for how whistleblowers, consumer groups and elected leaders can work together to protect motorists from market manipulation. It’s also testament to the anti-competitive nature of the domestic refining industry that Shell had to be forced to collect a $130 million check for this sale instead of detonate a perfectly viable refinery. Bakersfield should remind regulators and the public that left to their own devices oil companies would rather cheat by limiting supply to hike fuel prices than compete by selling more fuel.”
– 30 –