Washington (Platts)--26Jun2009

Three of seven large oil company mergers since 2000 studied by the US
Government Accountability Office have had a slight impact on the domestic
wholesale gasoline market, the agency said Friday.

Two of the three deals were associated with an increase of about 1
cent/gal and one linked with a price decrease of just under 2 cents/gal, GAO
said in the release of a study it conducted. The price impact of the four
other mergers was not statistically significant, GAO said.

The 2001 Valero Energy/Ultramar Diamond Shamrock refinery acquisition was
associated with a price increase of 1.06 cents/gal and the 2005 Valero/Premcor
merger was associated with an increase of 1.13 cents/gal, GAO said.

The 2001 Phillips/Conoco merger, which primarily involved the acquisition
of oil exploration and production assets, was associated with an average price
decrease of 1.64 cents/gas across the cities affected by the merger.

GAO said its analysis suggested that less concentrated markets were
associated with lower wholesale gasoline prices. The agency estimated that
prices were about 8 cents/gal lower at terminals with 14 sellers than at
terminals that had only nine sellers. Terminals can be near refineries and
pipelines and can involve a wide-ranging number of wholesale gasoline sellers,
including refiners and importers, the study said.

"Because of the complexity of the US petroleum industry, it can be
difficult to predict the impact of mergers before they are completed," GAO
said. Reviewing the effects of past mergers on fuel prices "could allow the
Federal Trade Commission to determine whether the actual effects of a merger
reflect the anticipated effects," it said

The mergers that did not have a statistically significant price effect
were Chevron/Texaco, Phillips/Tosco, Shell/Texaco and Premcor/Williams, GAO
said.

The study was requested by Democratic senators Charles Schumer of New
York, Herb Kohl of Wisconsin, Dianne Feinstein of California and
Representative Henry Waxman, Democrat-California.

--Gerald Karey, gerry_karey@platts.com