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Group Accuses U.S. Refineries of Driving Up Gasoline Prices

July 03, 2001|TYNISA E. TRAPPS | TIMES STAFF WRITER

WASHINGTON — U.S. refineries have contributed to gasoline price increases during the last two years by closing storage facilities, withholding supplies in some markets and undergoing mergers, a consumer group charged Monday.

Gas prices are about 20 cents per gallon higher than they were in the late 1990s, costing consumers an additional $150 a year per household, according to a study by the Consumer Federation of America.

"It is time for the government to say to the people, 'We will speak up for you, we will be on your side' . . . and say to the oil companies, 'Enough is enough,' " said former Sen. Howard M. Metzenbaum (D-Ohio), the group's chairman.

The report says more than 70 refineries have closed in the last 15 years and the number of petroleum storage facilities has fallen nearly 15%, greatly reducing supply.

"A concentrated, vertically integrated industry has responded slowly to price shocks and has even acted to keep supplies off the market," said Mark Cooper, the group's director of research.

But industry representatives called the report's charges "groundless."

Bill Hickman, a spokesman for the American Petroleum Institute in Washington, said the allegation that larger companies have merged to monopolize the industry is false because many large refineries still must compete against each other as well against as smaller companies.

David Heck, manager of marketing, legislative and regulatory affairs for Chevron Products Corp. in San Francisco, said some oil refineries have closed in recent years because it was more cost-effective to cease production. "It's a matter of economics," Heck said.

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