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

ExxonMobil forecasts 35% higher world energy demand by 2040

12/15/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

ExxonMobil forecasts 35% higher world energy demand by 2040

12/10/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

Firms' third-quarter earnings climbed amid lower crude oil prices

12/08/2014 A sample of 58 oil and gas producers and refiners based in the US recorded a combined 38% jump in profits for this year's third quarter compared wi...

Chapman to succeed Pryor as ExxonMobil Chemical president

11/24/2014 Neil A. Chapman is expected to assume the roles of president of ExxonMobil Chemical Co. and vice-president of ExxonMobil Corp. following the retire...

Induced seismicity research effort identifies information gaps

11/10/2014 A federally coordinated effort to determine whether oil and gas activities are related to growing reports of induced seismic activity has identifie...

ExxonMobil, Linn to make second asset exchange this year

10/06/2014 ExxonMobil Corp. has agreed to trade interest in 500 net acres from South Belridge field near Bakersfield, Calif., to Linn Energy LLC, Houston, in ...

ExxonMobil 'winds down' Arctic well, obeys sanctions

09/29/2014 ExxonMobil Corp. released a statement that it is complying with all US sanctions on Russia after news reports that the operator had halted operatio...

AAPG ICE: ExxonMobil outlines international approach to unconventional development

09/22/2014 Global energy demand is expected to increase 35% to 2040, translating to 120 billion boe/year, or nearly 350 million boe/d, stated Rocky Becker, vi...

ExxonMobil ‘winding down’ Arctic well, complying with US, EU sanctions on Russia

09/19/2014 ExxonMobil Corp. released a statement that the company is complying with all US sanctions on Russia after news reports that the operator had halted...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


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