FTC to probe antitrust allegations against oil companies

Source: Amanda Peterka, E&E reporter • Posted: Monday, August 26, 2013

The Federal Trade Commission this week said it will look into claims that oil companies are using their muscle to block more ethanol from entering the marketplace.

The agency told Sens. Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) it would evaluate their allegations that oil companies’ actions were violating federal antitrust laws.

“I can assure you that we will continue to make every effort to identify, prevent and prosecute practices in petroleum and other markets that violate any statute or rule that the agency enforces,” FTC Chairwoman Edith Ramirez said in a letter dated Monday.

The senators earlier this month had called on the FTC to launch a probe over claims that oil companies were preventing gas stations from selling gasoline containing 15 percent ethanol, as opposed to the 10 percent blend that has historically been sold at most gas stations. Gas stations, they alleged, were instead forcing franchises to sell premium gasoline.

Such actions were possibly in violation of at least two federal laws, the senators argued.

“By forcing a franchisee to carry premium gasoline as a condition of carrying regular gas, the oil company may be using its economic power over its franchisee to effect a tying arrangement in violation of the Sherman Act,” Klobuchar and Grassley said. “This conduct may also violate the Gasohol Competition Act of 1980, which prohibits discrimination or unreasonable limits against the sale of gasohol or other synthetic motor fuels” (Greenwire, Aug. 21).

The senators, who released the FTC’s response yesterday, applauded the agency’s move.

“The allegations from retailers about possible anti-competitive practices from Big Oil are disheartening, but not surprising, knowing the lengths Big Oil will go to in order to keep biofuels out of the fuel supply,” Grassley said. “It’s going to take an ‘all-of-the-above’ approach to wean the United States off of foreign sources of oil, so it only makes sense that we all work together. I appreciate the FTC taking a look at the allegations and look forward to their conclusions.”

Earlier this week, Charles Drevna, president of American Fuel & Petrochemical Manufacturers, called the claims “all flash and no substance.”

The biofuels industry, though, applauded the call for an investigation as long overdue.