BP denies charges of gasoline market manipulation

BP officials denied charges of gasoline market manipulation contained in a civil class action suit filed this summer in an Illinois state court against it and five other major oil companies.

"We have been very open about the causes of this summer's (gasoline) supply disruption in discussions with our customers and in our testimony before the US Congress and Illinois legislative committee looking into the mater. We believe this suit is without merit," said Tom Mueller, BP spokesman.

He said the class action suit was filed in June in an Illinois circuit court by a person who is campaigning for election to the Illinois Supreme Court. Named in that suit were Amoco, now a unit of BP; Mobil Corp., now a unit of ExxonMobil Corp.; Citgo Petroleum Co.; Phillips Petroleum Co.; Clark Oil & Refining Corp.; and Shell Oil Co., he said.

The Federal Trade Commission also is looking at the fly-up in US gasoline prices (OGJ Online, July 28, 2000). Therefore, Mueller said, "We cannot comment regarding any specific allegations this lawsuit may contain."

Instead, BP officials at a Sunday press conference in Chicago distributed an Oct. 18 report by the American Petroleum Institute that refutes similar charges of price manipulations in a summer study sponsored by the Foundation for Taxpayer and Consumer Rights. That was done to counter a Sunday press conference by the plaintiff in the Illinois suit, Mueller said.

API refutes study
The consumer study was done by Tim Hamilton, a former service station operator-turned-industry consultant in Olympia, Wash. That study concluded that major refiners and marketers shipped reformulated gasoline supplies out of the midwest Petroleum Administration for Defense District II (PADD II), which includes Chicago, in an effort to drive up pump prices. It also said that refiners exported gasoline supplies that could have been reformulated.

PADD II suffered the worst impact of the gasoline price spike, with increases of 40-65�/gal, or as much as 43.8%.

The consumer study recommends that:

� State and federal official adopt a nationwide standard for gasoline formulations "so oil companies can no longer manipulate inventories in a manner that creates price spikes."

� Close "loopholes" in antitrust and commodity trading laws to provide for criminal prosecutions for "creation of price spikes."

� Pass measures to "control the flow of crude and refined product exports to ensure that multinational oil companies do not abuse the interests of this nation and its citizens."

The API report says, "The study cites only shipments out of the district. It does not cite shipments into the district, which are on average 6 times larger than the shipments out. � Net receipts in the first quarter of 2000 were 19% above 1999 first-quarter levels."

Some refineries in PADD II border states of Oklahoma, Ohio, North Dakota, Tennessee, and Kansas may have shipped gasoline across state lines into nearby markets in adjoining PADDs "because shipping costs were much lower."

However, the API report said, "This is simply an efficient business process that lowers costs to consumers. Characterizing transfers out of the PADD as a conspiratorial practice, as the study does, is simply wrong and misguided."

Moreover, API officials said, "The study � ignores the fact that exports of gasoline from PADD II declined by 35% between the first quarter of 1999 and the first quarter of 2000."

It also said the consumer study "barely mentions the effects of disruptions caused by a major pipeline shutdown at a crucial time" and ignores other industry conditions.

Related Articles

Watching Government: Change in Saudi Arabia?

06/15/2015 International observers are still considering the extent, if any, of changes since Salman bin Abdulaziz Al Saud became Saudi Arabia's king in Janua...

A hundred-year Hail Mary?

06/15/2015 Comparing it to a can't-look-away train wreck, Reuter's financial columnist James Saft, in a June 2 article, viewed the recent issue of 100-year bo...

ExxonMobil’s Liza-1 well encounters oil offshore Guyana

05/20/2015 Esso Exploration & Production Guyana Ltd., a unit of ExxonMobil Corp., reported an oil discovery on Stabroek block 120 miles offshore Guyana.

Kizomba Satellites Phase 2 off Angola starts oil productionwise advantaged projects to the south.

05/11/2015 Esso Exploration Angola (Block 15) Ltd., a subsidiary of ExxonMobil Corp., has started oil production ahead of schedule at the Kizomba Satellites P...

LNG export limits violate US free trade tradition, ExxonMobil executive says

04/27/2015 The US should remove the national interest demonstration requirement for LNG exports to countries with which it does not have a free-trade agreemen...

LNG export limits violate US free trade tradition, ExxonMobil executive says

04/21/2015 The US should remove the national interest demonstration requirement for LNG exports to countries with which it does not have a free-trade agreemen...

ExxonMobil resumes drilling from Point Thomson near ANWR

03/23/2015 Following years of legal wrangling, ExxonMobil Corp. has resumed drilling in the high-pressure Point Thomson gas-condensate field on Alaska's North...

Chevron, Shell among most active bidders in central gulf sale

03/18/2015 Chevron Corp., ExxonMobil Corp., Royal Dutch Shell PLC, and Statoil ASA mostly led the way as Gulf of Mexico central planning area Lease Sale 235 d...

Tillerson: Sound policies needed to buoy N. American energy revolution

03/13/2015 The US government needs to adjust its energy policies to ensure the country realizes all the benefits of the new era of energy abundance, said Rex ...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected