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

Second ExxonMobil crude tanker nears service

01/12/2015 The second of two new US-flagged crude oil tankers belonging to SeaRiver Maritime Inc., the marine affiliate of ExxonMobil Corp., has been built an...

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...
White Papers

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

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


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